2. Toronto Skaters currently has $1,000,000 of 8% convertible debt outstanding. The coupon interest is paid on an annual basis. The $1,000 face value debentures mature in 12 years and have a conversion price of $50. Similar straight debt currently yields 7%. If the firms common stock is currently trading for $55 per share, then:

   1. a) What is the current straight debt value, conversion value and floor price?

   2. b) If all the convertible holders decided to convert, then how many additional shares would

      have to be issued?

Thanks!