Atlas Anglers Inc.is considering issuing a 16-year convertible bond that will be priced at its $1,000 par value.The bonds have a 7.5% annual coupon rate,and each bond can be converted into 21 shares of common stock.The stock currently sells at $38.00 a share,has an expected dividend in the coming year of $3.80,and has an expected constant growth rate of 5.9%.What is the estimated floor price of the convertible at the end of Year 3 if the required rate of return on a similar straight-debt issue is 9.8%? Do not round your intermediate calculations.

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? 11ea856c_8af7_0ce3_9aec_3d711f00c197_TB1222_00 Find the straight-debt value: N = 13,I/YR = 9.8%,PMT = ?75,and FV = ?1,000.PV = $834.92 Conversion value = P₀ × CR × (1 + g)^t Conversion value = $38.00 × 21 × (1.059)³ Conversion value = $947.74 The floor value is the higher of the bond value or the conversion value,so it is $947.74.