ccc v ccco, page-7

Hi Hope,
In fact i think you were correct in your calculations.
Options are just another form of leverage.
As you point out, 1.6c effective interest over 2 years.
[you are effectively being given a loan of 5c per share over 2 years]
If you want to increase your leverage, it is much cheaper to borrow, at say 8 to 9%, to buy more ccc's.
Exactly the same number of shares, just cost you less than converted options[when the 2 years is up].
If heads price in 2 years is below the exercise price[5c], then the equation changes of course.

cheers