You purchased a convertible bond three years ago. It has a 6.5% coupon rate, par value of $1,000, interest is paid semiannually, and the bond matures in 7 years. If the firm stock currently trades at $36.50 per share and bond is convertible at $31.25 per share, calculate conversion value:

$1,225

$1,168

$1,000

$1,264