Empirical Study On The Factors Influencing The Trading Price Of Convertible Bond

Share allotment, additional equity offer, and convertible bond are predominant in Chinese refinancing market, and the convertible bond is a financial derivative which has the property of both bond options and stock options. With the development of stock market in china, convertible bond has become an important financing tool in the listed companies of china, and investment products that concerned by the majority of investors. Introduction of convertible bond can help fostering the investor’s theory of correct investment, making the volatility of bond market stable, promoting the development of China’s bond market. At the same time, understanding of the relevant principles of convertible bond and the factors that influence the trading price of convertible bond also can help market participants making successful investment financing strategy, and then accelerate the development of convertible bond. Therefore, the reasonable analysis and accurate estimation of convertible bond trading price have great significance on the investor sand the issuers and the healthy development of convertible bond market.The basic method adopted in this paper is to combine the theoretical analyses as well as positive research approach, systematically combs the research literatures in both domestic and foreign on convertible bond pricing theory, commenting on the basis of grasp the connotation, gives a detailed analysis of the convertible bond properties, elements, classification, motivation and the risk of investment to offer the important factors influencing the convertible bond price, using the date of thirty-four listing corporations that issuing convertible bond in2012, the trading price of convertible bond as dependent variable, the conversion price, the remaining maturity, stock price, interest rate, size distribution, stock volatility due, stock dividends and corporate credit rating as independent variable, building multiple regression model, the regression results show that the remaining maturity, there is a negative correlation between the stock price, the stock volatility due and convertible bond trading price, a positive correlation between stock dividend and convertible bond trading price. On the basis of the above research, this paper combining with the actual situation of Chinese listing corporations, putting forward the corresponding countermeasure and suggestion to regulating the behavior of issuing convertible bond, which can provides guidance on new convertible bond price valuation and investment decision of investors.