Question: 7. (15 points) Consider a Tesla convertible note with a $1,000 par value that is convertible into Tesla common stock. It has a coupon of

7. (15 points) Consider a Tesla convertible note with a $1,000

7. (15 points) Consider a Tesla convertible note with a $1,000 par value that is convertible into Tesla common stock. It has a coupon of 6%, payable annually. The bond is priced at $990. This convertible bond has a conversion ratio of 20. The current stock price is $40 per share. What is the conversion value of the bond? What is the conversion premium of the bond? 8. (15 points) I buy a T-Bill with face value $1000 for $990. The maturity of the T-Bill at the time of purchase is 60 days. What is the bankers discount rate? What is bond equivalent yield? What is effective annual yield

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