Conversion value

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Convertible bonds.

The total current market value of the ordinary shares (or other securities) for which each convertible bond may be exchanged (at the bondholder's option).


Example

Convertible bonds are in issue, each of which may be exchanged for 40 ordinary shares.

The ordinary shares are currently trading in the market at £2 each.

The conversion value is given by:

= 40 x £2

= £80.


See also