HCB has just issued $20-$year $$1000$ par value convertible bonds with a coupon rate of $6\%$ and they are each worth $$1000.$ Each bond can be converted into $25$ shares of common stock. What is the conversion price of the bond? If HCB is trading for $$30$ per share, then what is the conversion value of the bond? If HCB$\text{'}$s straight$-$debt yield to maturity is $7\%,$ then what is the value of the option to convert? Which answers are different if$,$ instead of trading at par $($$$1,000),$ the bonds are currently trading at $$1,100$ each? Answers: Conversion price $=$ $$40$; conversion value $=$ $$750$; value of conversion option $=$ $$105\mathrm{.}94$; If the bonds are trading at $$1,100$ then the value of the conversion option $=$ $$205\mathrm{.}94.$