Question 2 a) On 1 January 2020, Belgrade plc ('Belgrade'), a company with a 31 December year end, sold 240,000 of 6% convertible bonds at par. Interest is payable on an annual basis, at the end of each financial year. The bonds must be repaid at par on 31 December 2024, but investors may also convert the bonds into Belgrade's ordinary shares at that date. Required: Using a discount rate of 7%, calculate the fair value of the liability component and the equity component of these convertible bonds. (20 marks)