The Price Theory And Case Study On Convertible Bonds Of Public Firms In China

With the development of the capital market in China, convertible bonds is a new derivative financial product, and its price theory has some complexity. The article uses The Least Value Theory and the modified Black-Scholes Model which considering the complexion of stock bonus. Then we have the value of convertible bonds=MAX(straight bonds value, conversion value)+options value. The case study and the empirical analysis show that the modified model can effectively fetch up the model before modified and gives a more accurate prediction to the price of the convertible bonds.