Lets say General Electric stock currently sells for $6.72 compared with the 1999 high of nearly $60 per share. Its a dog with fleas, right? If a (face value $1,000) bond is convertible into common stock at a conversion price of $20, at any time, what is the conversion ratio? Is the conversion premium reasonable or expensive given what you know about GE right now? What is the floor value of the convertible security explain fully? Assume that time = 5 years Kd = 10%.