with show work please

Tulsa Drilling Company has $1.2 million in 11 percent convertible bonds outstanding. Each bond has a $1,000 par value. The conversion ratio is 50, the stock price is $28, and the bonds mature in 10 years. The bonds are currently selling at a conversion premium of $60 over the conversion value. UseAppendix BandAppendix Das an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a.Today, one year later, the price of Tulsa Drilling Company common stock has risen to $38. What would your rate of return be if you had purchased the convertible bond one year ago and sold it today? Assume that on the date of sale, the conversion premium has shrunk from $60 to $10. (Hint: Don't forget to include the interest payment for the first year)

b-1.Assume the yield on similar nonconvertible bonds has fallen to 8 percent at the time of sale. What would the pure bond value be at that point? (Use semiannual analysis.)

Appendix D Present value of an annuity of $1, PV IFA PVA = A (1+ i)n Percent Period 1% 2% 3% 4% 5% 6% 7% 8% 9% 11% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.909 0.901 1.970 1.942 1.913 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3. 102 3.037 4.853 4.713 4.580 4.452 4.329 4.212 4. 100 3.993 3.791 3.696 3.605 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.486 4.231 4. 111 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 9 8.566 8. 162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 9.471 8.983 8.530 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.495 6.207 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 6.814 6.492 6. 194 13 12. 134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.103 6.750 6.424 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 15 13.865 12.849 11.938 11.118 10.380 9.712 9. 108 8.559 7.606 7.191 6.811 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 17 15.562 14.292 13.166 12. 166 11.274 9.763 9.122 8.544 8.022 7.549 7.120 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.201 7.702 7.250 19 17.226 15.678 14.324 13. 134 12.085 11. 158 10.336 9.604 8.365 7.839 7.366 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.469 25 22.023 19.523 17.413 15.622 14.094 11.654 10.675 9.823 9.077 8.422 7.843 30 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 50 39. 196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 9.042 8.304