the company will 1. Your company is considering the issuance of some 25 year bonds. If the company issued straight debt the required rd is 10.5%, however the company be a little strapped for cash in the short term before its investment opportunities really start to pay off. Therefore it would prefer to pay a low rate by issuing convertible bonds. to pay a lower Par Value: $1000 Coupon rate: 10% annual coupon Term: 25 years Conversion ratio: 27 shares Call Price: $1100 Po = $32; g = 10%; a)If this convertible bond sells for $1000, then how much is the straight bond value. [8 points] b) Calculate what rate of return the investor would get if the bond were converted after 12 years. [4 points) the company will 1. Your company is considering the issuance of some 25 year bonds. If the company issued straight debt the required rd is 10.5%, however the company be a little strapped for cash in the short term before its investment opportunities really start to pay off. Therefore it would prefer to pay a low rate by issuing convertible bonds. to pay a lower Par Value: $1000 Coupon rate: 10% annual coupon Term: 25 years Conversion ratio: 27 shares Call Price: $1100 Po = $32; g = 10%; a)If this convertible bond sells for $1000, then how much is the straight bond value. [8 points] b) Calculate what rate of return the investor would get if the bond were converted after 12 years. [4 points)