Convertible Bond Calculator
How to Use
What this tool does
A convertible bond carries both equity and debt characteristics, so looking at its market price alone is misleading. Enter the underlying share price, conversion price, bond market price, face value, coupon rate, remaining years, redemption price and discount rate, and this tool returns conversion value, conversion premium, straight bond value and yield to maturity together.
Conversion value is face value divided by conversion price times the share price. With a face value of 100, a conversion price of 15 and a share price of 18, conversion value is 120; at a bond price of 128 the premium is about 6.67 percent. Straight bond value discounts the remaining coupons plus the redemption amount at your discount rate, and YTM is solved from those same cash flows.
The result panel also shows commonly referenced trigger levels for mandatory redemption and put provisions. Any edit recalculates in place, and a missing input produces a prompt rather than a zero-driven set of plausible-looking numbers.
The four outputs are deliberately kept on one screen because they answer different questions. Conversion value follows the equity side: face value divided by conversion price gives the number of shares, and multiplying by the current share price gives what those shares are worth. The premium compares that figure with the bond's market price, so a premium of six point six seven percent means you are paying that much above the value of the shares you could convert into. Straight bond value ignores conversion entirely and discounts the remaining coupons plus the redemption amount at the discount rate you supply; it is the debt floor, and it is highly sensitive to that rate, which should reflect the issuer's credit rather than a risk-free number. Yield to maturity is solved from the same cash flows, so the two debt figures cannot disagree with each other. Trigger references for call and put clauses are shown as common ratios to the conversion price, not as that bond's terms: the offering documents govern, and clauses on downward revision, early redemption and resale differ by issue. Cash flows are pre-tax and exclude trading costs. A zero conversion price is rejected rather than producing Infinity. These figures clarify the trade-off between the equity and debt sides; they are not a buy or sell signal.
Key features
- Conversion value: Derived from face value, conversion price and the underlying share price.
- Conversion premium: How far the bond price sits above or below conversion value, with the sign shown.
- Straight bond value: Remaining coupons and redemption are discounted at your chosen rate to give the bond floor.
- Yield to maturity: Solved from the same cash flows, so it stays consistent with bond value.
- Trigger references: Commonly cited levels for mandatory redemption and put clauses, ready to compare with the prospectus.
- Missing-input checks: An incomplete form prompts for the gap instead of treating blanks as zero.
How to use it
- Enter equity inputs: Fill share price, conversion price and bond market price, all in CNY.
- Enter debt inputs: Fill face value, coupon, remaining years, redemption price and discount rate.
- Press Calculate: The panel returns conversion value, premium, straight bond value and YTM.
- Read the triggers: Compare the reference levels with the actual clauses in the offering documents.
- Test other prices: Change a parameter to see how the premium moves as the underlying moves.
Things to keep in mind
- Prospectus governs: Call, put and reset clauses differ by issue; the page shows common ratios, not that bond's terms.
- Tax and fees excluded: Cash flows use pre-tax coupons; actual proceeds also bear tax and trading costs.
- Discount rate is a judgement: Bond value is sensitive to it, so use a yield consistent with the issuer's credit risk.
- Positive prices only: A zero conversion price would divide by zero; the tool asks for a correction instead of returning Infinity.
- Not investment advice: These four figures clarify terms and price; any decision still needs the underlying and credit picture.