CONVERTIBLE BONDS AND SPECIFITS OF ITS VALUATION

Božena Hrvoľová, Anna Polednáková

Abstract


Convertible bonds belong to the group of innovations, which are connected with common features of more securities that are named hybrid or synthetic securities. This article will discuss advantages of these securities for investors and companies’ (issuers), specifics of convertible bonds valuation, conversion premium and premium for option, which are connected with convertible bonds valuation and with investors´ decision making, whether they will remain in the position of holder or whether they will convert convertible bonds into the shares of company.

Keywords


Convertible Bond; Stock; Appreciation; Internal Value; Conversion Ratio; Conversion Value; Conversion Premium; Premium for Right

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Online: 2013-10-21