Kurt Owns a Convertible Bond That Matures in Three Years

Kurt owns a convertible bond that matures in three 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 $16.67. Similar bonds have a market return of 9 percent. The current price of the stock is $17.50. What is the conversion value of this bond?

A) $952.57
B) $974.69
C) $1,038.30
D) $1,049.79
E) $1,144.27