Conversion Ratio. When a $50,000 convertible bond is issued, the market price of the stock is $25 a share. Each $1,000 bond is convertible into 40 shares of stock. (a) What is the conversion ratio?...

Conversion Ratio. When a $50,000 convertible bond is issued, the market price of the stock is $25 a share. Each $1,000 bond is convertible into 40 shares of stock. (a) What is the conversion ratio? (b) What is the conversion value? (c) Assuming the stock price is anticipated to grow at 8 percent annually, what is the conversion value at the end of the first year?