Assume that Chen Inc. has issued a BB-rated convertible bond with an annual coupon of 4%, a par value of $1000 and 12 years to maturity. Nonconvertible BB-rated bonds of this maturity have a yield of 6%. The bond has a conversion ratio of 20 and the firms shares are currently trading at $41.5. What is straight bond value (its value assuming the option to convert was worthless) of the Chen bond?

$832.32

$496.97

$335.35

None of the above