Convertible Bonds Theoretical Pricing And Practical Analysis

The invention of Convertible Bonds in derivative market not only provides a new financial tool,but also finds out a new means for the practice of finance.So at first the question of Convertible Bonds prising must be resolved.The Convertible Bonds is a kind of rather complicated credit derivative.Besides the common debt,it includes many options,such as conversion option ,call option ,put option and the lower conversion price.The complexity of cluses in Convertible Bonds results in the difficulities of Convertible Bonds pricing. Black-Scholes option pricing model is one of the most important concepts in modern financial theory, which succeeds in pricing Convertible Bonds.Emphasis on the Black-Scholes option pricing model, my dissertation is dedicated to introducing the main theories about pricing of Convertible Bonds,then I will explore the practical economic practice in the economic development. At last, connecting the specific economic environment of China, I will compare empirically the Convertible Bonds price in china with the price calculated by using Black-Scholes option pricing model,and point out sots of poblems in China's Convertible Bonds market and the policy enviornment to be improved. Meanwhile, l will try to reveal the implications which are brought to China's Convertible Bonds market by these pricing theories of Convertible Bonds.