Convert issues a convertible loan that attracts interest of 2%. The market rate is 8%, being the interest rate for an equivalent debt without the conversion option. The loan of $5 million is repayable in full after three years or convertible to equity. Discount factors are as follows: Year Discount factor at 8% 1 0.926 2 0.857 3 0.794 Required: Split the loan between debt and equity at inception and calculate the finance charge for each year until conversion/redemption.