Consider the following convertible bond:

Par value = $1000

Coupon rate = 6.0%

Market price of convertible bond = $950

Conversion ratio = 30

Estimated value of option-free bond = $750

The current price of the common stock is $30 and the annual dividend is $1.50

Calculate the following:

a) Conversion value

b) Market conversion price

c) Market conversion premium ratio

d) Market value of convertible bond if stock price is $40