1. Suppose company N has a convertible bond in issue with face or principal value of

$1,000, coupon rate 1.25%, conversion Ratio of 25 N shares (in relation to $1,000 bond face value) and maturity date of 31 August 2025.

Suppose stock N currently trades at $41 per share and Ps convertible bond at

$1,023 (per $1,000 face value). Accordingly, determine:

1. The Conversion Price of the bond.

2. The bonds Conversion Value (per $1,000 face value)

3. The arbitrage profit available from shorting 500,000 N shares and simultaneously buying $20,000,000 face value of the convertible bond. Assume zero transaction costs and liquidity in both stock and bond.