You are interested in buying ABC Company's securities. You can buy common stock at $40 per share. This stock pays $0.8 dividends per share. You can also buy a 7% annual coupon convertible bond maturing in 15 years that has a conversion ratio of 20. The convertible bond price is quoted at 92.50.

What is the conversion premium, in dollars and as a percentage?

What is the bond's payback period?.If comparably rated nonconvertible bonds sell to yield 8.5%,

what is the investment value of the convertible?