Pricing, Financing Advantage and Disadvantage of Convertible Bond

摘要

Convertible bond is an attractive instrument of financing in the international capital market nowadays. It partly enjoys the characteristics of bond, common stock and options at the same time. With the advantage of lower the financing cost, it brings high risk to the issuers as well. Based on the characteristics and pricing theory of convertible bond, this paper gives an analysis of the pricing mechanism and advantages as well as disadvantages of issuance convertible bond by public companies.