In the summer of 2012, the Hadaway Company was planning to finance an expansion with a convertible security. They considered a convertible debenture but feared the burden of fixed interest charges if the common stock did not rise enough to make conversion attractive. They decided on an issue of convertible preferred stock, which would pay a dividend of $1.05 per share. The common stock was selling for $21 a share at the time. Management projected earnings for 2012 at $1.50 a share and expected a future growth rate of 10% a year in 2013 and beyond. It was agreed by the investment bankers and management that the common stock would continue to sell at 14 times earnings, the current price/earnings ratio.

Assume the premium over the present common stock price will be set at 25%. What will be the conversion price of the preferred stock?