Neal Owns a Convertible Bond That Matures in Four Years

Neal owns a convertible bond that matures in four years. The bond has an 8 percent coupon and pays interest annually. The face value of the bond is $1,000 and the conversion price is $21.50. Similar bonds have a market return of 7.5 percent. The current price of the stock is $21.82. What is the conversion value of this bond?

A) $989.00
B) $1,000.00
C) $1,003.12
D) $1,008.16
E) $1,014.88