Problem:
Hilton Hotels Corp. has a convertible bond issue outstanding. Each bond, with a face value of $1,500, can be converted into common shares at a rate of 61.3003 shares of stock per $1,500 face value bond (the conversion rate), or $24.4697 per share. Hilton common stock is trading (on the NYSE) at $24.05 per share and the bonds are trading at $1,475.
Required:
Question: Calculate the conversion value of each bond?
Note: Please show how to work it out.