Problem: Pricing Convertibles

You have been hired to value a new 20-year callable, convertible bond. The bond has a 6.3 percent coupon, payable annually. The conversion price is $105, and the stock currently sells for $47.10. The stock price is expected to grow at 10 percent per year. The bond is callable at $1,200, but, based on prior experience, it won't be called unless the conversion value is $1,300. The required return on this bond is 9 percent.

What value would you assign to this bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Bond value $