PROBLEM $3$: Preferred Stock

The conversion ratio of Bonifacio Company's convertible preferred stock is $5$ common shares per $1$ share of preferred stock. The preferred stock's dividend payout is $$10\mathrm{.}00$ per share per year. The firm's common stock currently sells for $$20\mathrm{.}00$ per share and pays a dividend of $$1\mathrm{.}00$ per share per year.

Questions:

a$.$ Judging on the basis of the conversion ratio and the price of the common shares, what is the current conversion value of each preferred share?

b$.$ If the preferred shares are selling at $$96\mathrm{.}00$ each, should an investor convert the preferred shares to common shares?

c$.$ What factors might cause an investor not to convert from preferred to common stock?