A $1,000 convertible debenture has a conversion price of $75 per share, an annual coupon payment of $55, and a related stock price of $72.40 a share. What is the conversion value of this bond?

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The conversion value of a bond is calculated by determining how many shares the bond can be converted into and then multiplying that number by the current stock price. With a conversion price of $75 per share, a $1,000 debenture can be converted into $1,000 / $75 = 13.33 shares. Multiplying this by the current stock price of $72.40 gives a conversion value of 13.33 * $72.40 = $965.33.

A $1,000 Convertible Debenture Has a Conversion Price of $75