Schenkel, Inc., has a $1,000 face value convertible bond issue that is currently selling in the market for $910. Each bond is exchangeable at any time for 30 shares of the companys stock. The convertible bond has a 5.1 percent coupon, payable semiannually. Similar nonconvertible bonds are priced to yield 8 percent. The bond matures in 20 years. Stock in Schenkel sells for $27 per share.

a-1	What is the conversion ratio?

Conversion ratio

a-2	What is the conversion price? (Round your answer to 2 decimal places. (e.g., 32.16))

Conversion price

$

a-3	What is the conversion premium? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Conversion premium

%

b-1	What is the straight bond value? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

Straight bond value

$

b-2	What is the conversion value?

Conversion value

$

c	What would the stock price have to be for the conversion value and the straight bond value to be equal? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

Stock price

$

d	What is the option value of the bond? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Option value

$