The current equity price of firm XYZ is $10. The equity trades at a volatility of 20%. The firm issues a five-year convertible bond at a face value of $100 and a coupon of 6%. This bond may be converted into eight shares of equity at any time in the next five years. The risk-free interest rate in the market is 3%. The bond may also be called after two years at a call price of $105. Build a 20-period model to value this convertible bond, assuming that the equity price follows a binomial process. Make sure you account correctly for call and conversion features. Given the price, what is the premium on the bond? Also calculate the breakeven. On conversion, the holder of the bond loses the accrued interest.