Question 4: Maybach plc has in issue 10 per cent convertible bonds which will be redeemed in 10 years' time and which are currently selling at 93. Interest on the bonds is paid annually and each 100 bond is convertible into 25 shares at any time over the next two years. The current market price of Maybach plc's ordinary shares is 3.20 per share and this is expected to increase by 14 per cent per year for the foreseeable future. Bonds of a similar risk class have a cost of debt of 12 per cent. Advise an investor holding some of Maybach's convertible bonds as to which of the following courses of action to take: (i) sell the convertible bond now; (ii) convert the bond now or within the next two years; (iii) hold the bond to maturity