Rainier Bros. has 10.0% semiannual coupon bonds outstanding that mature in 10 years. Each bond has a par value of $1,000 and is now eligible to be called at $1,080. If the bonds are called, the company must replace them with new 10 year bonds. The flotation cost of issuing the new bonds is estimated to be $45 per bond. How low would the yield to maturity on the new bonds have to be for it to be profitable to call the bonds today, i.e., what is the nominal annual "breakeven rate"? 32. Valdes Enterprises is considering issuing a 10 year convertible bond that would be priced at its $1,000 par value. The bonds would have an 8.00% annual coupon, and each bond could be converted into 20 shares of common stock. The required rate of return on an otherwise similar nonconvertible bond is 9.50%. The stock currently sells for $40.00 a share, has an expected dividend in the coming year of $2.00, and has an expected constant growth rate of 6.00%. What is the estimated floor price of the convertible at the end of Year 3?