Price a 7% annual-coupon convertible bond that has a $1,000 face value, 2 years to maturity, conversion ratio=20. The bond is callable at par at the end of year 1. The term structure of interest rates is assumed to be flat at 10%. Assume the following binomial model for stock price evolution over the next 2 years, where up and down moves occur with equal probabilities.

t=0	t=1	t=2
		104.71
	73.79
52		51.99
	36.64
		25.82