Thinking On Convertible Debt Pricing

The rising of convertible debt in derivative market not only enriches the theory of derivative market ,but also finds out a new way in the practice of finance .But its development decided by correct pricing theory. Robert C. Merton and Myron S. Scholes are the winner of the Nobel Memorial Prize in Economic Science of 1997.They won Nobel Prize because of Black-Scholes option pricing model. Black-Scholes option pricing model is one of the most important concepts in modern financial theory. It has established the foundation of the pricing theory in convertible debt. Emphasis on the Black-Scholes option pricing model, My dissertation is developed to introduce the main theories about pricing of convertible debt ,then I will explore the practical economic practice in the economic development. At last, connecting the specific economic environment of China, I will compares empirically the convertible debt price in china with price calculated by Black-Scholes option pricing model from multi-asplects. Meanwhile, l will try to reveal the apocalypse which brought to China's convertible debt market and the actual development that existing in the China's financial market by these pricing theory of convertible debt.