Question: An 1 1 - year maturity convertible bond with a face value of $ 1 , 0 0 0 and a 5 % coupon on

An 11-year maturity convertible bond with a face value of $1,000 and a 5% coupon on a company with a bond rating of Aaa is selling for $1,130. The bond pays interest annually. Each bond can be exchanged for 20 shares, and the stock price currently is $50 per share. Other Aaa-rated bonds with the same maturity would sell at a yield to maturity of 7%. What is the value of the bondholders call option? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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