Steven Long, a bond analyst, is analyzing a convertible bond The characteristics of the bond are given below Convertible Bond Characteristics Par value $1,000 Annual coupon rate (annual pay) 7 2 Conversion ratio 25 Market price 105 of par Straight value 99 of par Underlying Stock Characteristics Current market price $32 per share Compute the bond 's conversion value and conversion price

Question: Steven Long, a bond analyst, is analyzing a convertible bond. The characteristics of the bond are given below. Convertible Bond Characteristics Par value ............................................... $1,000

Steven Long, a bond analyst, is analyzing a convertible bond. The characteristics of the bond are given below.
Convertible Bond Characteristics
Par value ............................................... $1,000
Annual rate (annual pay) .................... 7.2%
Conversion ratio ........................................... 25
Market price .................................... 105% of par
Straight value .................................... 99% of par
Underlying Stock Characteristics
Current market price ......................... $32 per share
Compute the bond's conversion value and conversion price.

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