Valdes Enterprises Is Considering Issuing a 10-Year Convertible Bond That

Valdes Enterprises is considering issuing a 10-year convertible bond that would be priced at its $1,000 par value.The bonds would have a 7.1% annual coupon,and each bond could be converted into 31 shares of common stock.The required rate of return on an otherwise similar nonconvertible bond is 10.1%.The stock currently sells for $43.00 a share,has an expected dividend in the coming year of $2.80,and has an expected constant growth rate of 6.0%.What is the estimated floor price of the convertible at the end of Year 4? Do not round your intermediate calculations.

A) $1,514.59
B) $1,935.31
C) $2,103.60
D) $1,682.88
E) $1,767.03