Rolling Railroad's common stock is currently priced at $40, and its 8 percent convertible debentures (issued at

Question:

Rolling Railroad's is currently priced at $40, and its 8 percent convertible (issued at par, or $1,000) are priced at $850. Each debenture can be converted into 25 shares of at any time before 2005. What is the conversion price, CP, and the conversion value of the bond?
Debentures
Debenture DefinitionDebentures are corporate loan instruments secured against the promise by the issuer to pay interest and principal. The holder of the debenture is promised to be paid a periodic interest and principal at the term. Companies who... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...