Question: Altech Inc. has a convertible bond with a face value of $1,000 and coupon rate of 6 percent. The bond will mature in 10 years,

Altech Inc. has a convertible bond with a of $1,000 and rate of 6 percent. The bond will mature in 10 years, and its current price is $950. The bond can be converted at any time into 25 shares of Altech Inc., whose current share price is $40. If the holder decides to convert the bond into shares, what is the percentage premium/discount of the conversion relative to the current share price?

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