A $1,000 face value 7% convertible bond has a maturity date of five years. The conversion price is $40. The market yield on bonds of comparable quality is 8%. The market price of the common stock is $38.50 currently. What is the minimum price at which the convertible bond should sell? a $962.50 b $960.07 c $1,000.00 d $959.44 e $1,022.50