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 straight-debt value
(a) $684.78
(b) $720.82
(c) $758.76
(d) $798.70
(e) $838.63