5.Lucinda owns a S1,000 face value convertible bond that matures in six years, has a coupon rate of 6.5
percent, paid annually, and a conversion price of $17.50. Similar bonds have a current market return
of 6.35 percent while the related stock is priced at $18.03 per share. What is the conversion value of
this bond?
(A) $1,007.30
(B) $1.028.45
(C) $996.11
(D) $1,030.29
(E) $1.000.00
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