Pacheco Inc. issued convertible bonds 10 years ago. Each bond had an initial term of 30 years, had a face value of $1000, paid a coupon rate of 11%, and was convertible into 20 shares of Pacheco stock, which was selling for $30 per share at the time. Since then the price of Pacheco shares has risen to $65 and the interest rate has dropped to 8.6%. What is the least that each of the bonds is worth today? Assume bond coupons are paid semiannually. Round PVFA and PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations. Round the answer to the nearest cent.

Comment on the function of the bond valuation procedure for convertibles.