Consider a 12 per cent convertible bond, redeemable at nominal value of £100 in six years’ time, which can be converted at any time in the next three years into 30 ordinary shares. The bond is currently trading ex-interest (buying the bond does not confer the right to receive the next interest payment) at £115.50 and the current ordinary share price is £3.20. The ex-interest market value of ordinary bonds of a similar risk class and maturity is £105.00.