Convertible

On 1 October 20X3 Bertrand issued $10 million convertible loan notes which carry a nominal interest
(coupon) rate of 5% per annum. The loan notes are redeemable on 30 September 20X6 at par for cash or
can be exchanged for equity shares. A similar loan note without the conversion option would have required
Bertrand to pay an interest rate of 8%.
The present value of $1 receivable at the end of each year based on discount rates of 5% and 8% can be
taken as:
5% 8%
End of year 1 0.95 0.93
2 0.91 0.86
3 0.86 0.79

here u take 10m into the coupon rate which is 5%, i can understand this, then why do you take 500k* the discounts factors of 8% it should be 5 nah?