Question: Determining values - Convertible bond Craig's Cake Company has an outstanding issue of 9 - year convertible bonds with a $ 1 , 5 0

Determining values-Convertible bond Craig's Cake Company has an outstanding issue of 9-year convertible bonds with a $1,500 par value. These bonds are
convertible into 60 shares of common stock. They have a 11% annual coupon interest rate, whereas the interest rate on straight bonds of similar risk is 13%.
a. Calculate the straight bond value of this bond.
b. Calculate the conversion (or stock) value of the bond when the market price is $17 per share of common stock.
c. What is the minimum market value of the bond?
Determining values-Convertible bond Craig's Cake Company has an outstanding issue of

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