Price Theory And Case Study On Convertible Bonds Of Public Firms

As a new financing instrument ,since convertible bond came to the capital market of China,becase of its speclation and investment, it was accepted by government and companies and investors Convertible bond may play an important role in broadening enterprises'financing channels,enrich the variety of investing instruments and make our security market prosperous.CSRC has issued the interrelated rules for public firms issue the convertible bonds.Until the end of 2001,it has 55 firms plan to issue the the convertible bonds.But by end of 2002 only 5 firms issued the convertible bonds because of investor'worry.But in 2003,the management strengthens the security market such as some public firms just to "fold money",the convertible bonds become the most invest tools for the public firms refinance.Only if the behavior of issuing convertible bonds is normalized our security market can tend towards a mature way, social capital can be optimized,and the public firms can also develop in an ample area.This paper base on the character of the convertible bonds. The paper compare to the A share convertible bonds in China in 2002 and 2003,put forward a method of make a price for the convertible bonds. The method not only utilize the Black-Scholes, but also consider the actually happening of the Chinese stock market.