You are considering the purchase of a convertible bond issued by Bildon Enterprises, a non-investment-grade medical services firm. The issue has seven years to maturity and pays a semiannual coupon rate of 7.125% (i.e., 3.5625% per period). The issue is callable by the company at par and can be converted into 48.870 shares of Bildon common stock. The bond currently sells for $960 (relative to par value of $1,000), and Bildon stock trades at $12.140 a share.

A. Calculate the current conversion value for the bond. Do not round intermediate calculations. Round your answer to the nearest cent.

Is the conversion option embedded in this bond in the money or out of the money?

B. Calculate the conversion parity price for Bildon stock that would make conversion of the bond profitable. Do not round intermediate calculations. Round your answer to the nearest cent.

C. Bildon does not currently pay its shareholders a dividend, having suspended these distributions six months ago. What is the payback (i.e., breakeven time) for this convertible security, and how should it be interpreted? Do not round intermediate calculations. Round your answer to two decimal places.

D. Calculate the convertibles current yield to maturity. Do not round intermediate calculations. Round your answer to two decimal places.

E. If a "straight" Bildon fixed-income issue with the same cash flows would yield 9.55%, calculate the net value of the combined options (i.e., the issuer's call and the investor's conversion) embedded in the bond. Do not round intermediate calculations. Round your answer to the nearest cent.