Design of Optimal Strategy for Convertible Bond Issuance

摘要

Considering the factors related to the convertible bond issuance,a model is developed to express the relationship between conversion rate and asset variation of the firm issuing the bond with the maximization of the firm's gross assets taken as the objective.The functional calculus is introduced to determine the optimal conversion rate so as to optimize the issuance strategy of convertible bonds,thus offering a new way for the design of original indenture for convertible bonds.Through the case study,a conclusion is drawn that the result of such an analysis is practically in agreement with the issuance indenture for convertible bonds and that effectiveness of the proposed method is therefore verified.