Study On Convertible Bond Investment And Financing In China

Convertible bond is one of the most important finance derivative products in our country's capital market. It is the bond which its holder can transfer into the company's share according to the contract in certain time. Convertible bond entrust with the investor certain choice right, the investor may hold the bond to the due date to obtain the principle and its interest, or they may choose to transfer it into the company's ordinary stock within the agreement time limit.As a result of modern finance theory's rapid development, the financial product and its innovation changes every new day, capital market's demand about financial product is also strengthening day by day. But in our country, study on the derivative product and the modern finance engineer is still at the start stage, the financial product is relatively few, therefore research on convertible bond is of great significance.At present, domestic research on this new investment product mainly concentrates on convertible bond's characteristic and qualitative analysis, while its reasonable pricing method is still have no accurate understanding. Convertible bond itself is also quite complex, so it is difficult to give a general pricing model. In contrast to former research, this article analyzed convertible bond's nature and classic pricing model, in addition, by the use of empirical analysis, the author analyzed its investment risk measure method which might provide some theoretically support for investor's investment decision-making. Besides that, this paper also does some research on the convertible bond's financing characteristic, which provided the operation basis for the publisher to choose the best financing opportunity and the reasonable provision design.The innovation of this paper lies in, by the use of Monte-Carlo method, we can know the convertible bond's accurate investment risk, which will provided support for the investment decision-making. At the same time, the study on convertible bond's financing characteristics will give some policy-making support for those publisher enterprises.