Question 7 Consider the following twenty-year maturity convertible bond which pays coupon semiannually: par value = $1,000, market price of convertible bond = = $950, coupon rate = 8%, conversion ratio = 25 shares, yield to maturity of straight bond 15%. Assume that the price of the common stock is $35 per share and that the dividend per share is $1 per year. Calculate each of the following: a) Estimated straight bond value, b) Conversion value, c) Market conversion price, d) Conversion premium per share, e) Conversion premium ratio, f) Premium over straight value, g) Favorable income differential per share, and h) Premium payback period