Empirical Research And Analysis Of Investment Value Of Convertible Bonds Of Listing Company

As a medial tool of investment, the flourish and development of market system of convertible bonds is helpful for maturity of Chinese capital market and elimination of financial risk. Compared with western country, Chinese convertible bonds market is still underway. Professionals always focus on the way of pricing of convertible bonds. It has signality for issuers and investors. For the issuers, no one would buy the convertible bonds whose price are too high, while its ability of financing will limited if the price is too low. For the investors, the right pricing would bring the opportunity of arbitrage. There are lots of researches on the pricing theory, numerical arithmetic and empirical researches. However, because the rapid development of our convertible market in latest two years, the theoretical researches and practice don't develop in the same step which leads to lacking of systematic and manipulative. We need to do more researches on Chinese convertible bonds market pricing.According to the characters and researches, the paper combines theoretical research with empirical research. And then the research on model that has been done is based on qualitative analysis which is in the turn of theoretical research-application research-empirical research.At first, the paper introduces relative definitions and compares different pricing model. And then, after analyzing the particularity of market and convertible bonds and the factors that influents the pricing model, the binominal tree model is established.The empirical research picks up all the listing convertible bonds. In the aspect of data and simples, the characters of all the recent convertible bonds are under the consideration. This paper chooses all the convertible bonds that are in different areas and liquidity whereas most researches just focus on several convertible bonds of high quality. Considering the instance of recent bond and stock market, we conclude a hypothesis that the market price is lower than theoretic value. Finally, we validate the conclusion by the software—Matlab.