Red Apple Furniture has issued a 5% convertible subordinated debenture due 2021. The conversion price is $45.50 and the debenture is callable at 102.75% of face value. The market price of the convertible is 92.50% of face value, and the price of the common stock is $35.00. Assume that the value of the bond in the absence of a conversion feature is about 65% of face value.

a. What is the conversion ratio? b. What is the conversion value? c. At what stock price is the conversion value equal to the bond value?