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 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?

when firm value exceeds $$2,500,000$

when firm value exceeds $$40,000,000$

when firm value exceeds $$400,000$

when firm value exceeds $$1,000,000$