Using the binomial option-pricing model calculate the current value at t = 0 of Magnus Bane International Plcs straight debt

MagnusBane International Plc, a listed company operating in the entertainment sector, has a current market value (net of coupon payments on its debt in the current period) of 170 million. The firm's market value has been projected to either increase by 50% or decrease by 30% in any one year. The company is financed through equity and callable, convertible debt consisting of 1,500,000 debentures. Each debenture has a face value of 100, a coupon of 3%, and a remaining term to maturity of two years. Each debenture may be converted into 20 shares at any time up to and including maturity. The company has the right to call the debt at any time. If the debt is called, debtholders must choose to either convert their debt immediately or accept the call amount consisting of a fixed payment of 130 per debenture. In addition to the callable, convertible debt, the company is also financed with a total of 5 million outstanding shares. So far, the company has never paid dividends, and it is not expected to do so within the next two years. The annual risk-free rate of interest is predicted to remain constant at 3% per annum over the next two years. MagnusBane International Plc, a listed company operating in the entertainment sector, has a current market value (net of coupon payments on its debt in the current period) of 170 million. The firm's market value has been projected to either increase by 50% or decrease by 30% in any one year. The company is financed through equity and callable, convertible debt consisting of 1,500,000 debentures. Each debenture has a face value of 100, a coupon of 3%, and a remaining term to maturity of two years. Each debenture may be converted into 20 shares at any time up to and including maturity. The company has the right to call the debt at any time. If the debt is called, debtholders must choose to either convert their debt immediately or accept the call amount consisting of a fixed payment of 130 per debenture. In addition to the callable, convertible debt, the company is also financed with a total of 5 million outstanding shares. So far, the company has never paid dividends, and it is not expected to do so within the next two years. The annual risk-free rate of interest is predicted to remain constant at 3% per annum over the next two years