Robbins Petroleum Company is four years in arrears on cumulative preferred stock dividends. There are 850,000preferred shares outstanding, and the annual dividend is $6.50 per share. The vice-president of finance sees no realhope of paying the dividends in arrears. She is devising a plan to compensate the preferred stockholders for 90 percent of the dividends in arrears.a. How much should the compensation be?b. Robbins will compensate the preferred stockholders in the form of bonds paying 12 percent interest in a marketenvironment in which the going rate of interest is 14 percent for similar bonds. The bonds will have a 15-year maturity. Using the bond valuation table in Chapter 16 (Table 16–3 on page 500), indicate the market value of a$1,000 par value bond.c. Based on market value, how many bonds must be issued to provide the compensation determined in part a?(Round to the nearest whole number.)SolutionProblem 17-20InstructionsEnter formulas and functions to calculate the requirements of this problem.InformationDividend per share$6.50 Shares outstanding850,000Years in arrears4Compensation percentage90%a. How much should the compensation be?FORMULAb. Robbins will compensate the preferred stockholders in the form of bonds paying 12 percent interest in a marketenvironment in which the going rate of interest is 14 percent for similar bonds. The bonds will have a 15-year maturity. Using the bond valuation table in Chapter 16 (Table 16–3 on page 500), indicate the market value of a$1,000 par value bond.Bond valueFORMULAc. Based on market value, how many bonds must be issued to provide the compensation determined in part a?(Round to the nearest whole number.) FORMULA