The following data applies to Saunders Corporation's convertible bonds:
Maturity: 10
Stock price: $30.00
Par value: $1,000.00
Conversion price: $35.00
Annual coupon: 5.00%
Straight-debt yield: 8.00%
What is the bond's conversion value?
a) $698.15
b) $734.89
c) $773.57
d) $814.29
e) $857.14