A Zero-Coupon, Convertible Bond Promises to Pay $1,000 Upon Maturity

A zero-coupon, convertible bond promises to pay $1,000 upon maturity and can be converted into 40 shares of common stock at its maturity date. There are 1,000 of these bonds
Outstanding, and the firm has 100,000 shares of stock outstanding. At what level of firm value
Will the firm's shareholders begin to receive a payoff?

A) when firm value exceeds $400,000
B) when firm value exceeds $40,000,000
C) when firm value exceeds $1,000,000
D) when firm value exceeds $2,500,000