A pricing model for chinese convertible bond.pdfVIP

Fixed incomepaper A pricing model for Chinese convertible bond based A pricing model for Chinese convertible bond based AA pprriicciinngg mmooddeell ffoorr CChhiinneessee ccoonnvveerrttiibbllee bboonndd——bbaasseedd onthebinomialmodeland MonteCarlosimulation onthebinomialmodeland MonteCarlosimulation oonntthheebbiinnoommiiaallmmooddeellaannddMMoonntteeCCaarrlloossiimmuullaattiioonn LIU SHUJIAN LIU SHUJIAN LLIIUU SSHHUUJJIIAANN 座机电话号码89 座机电话号码89 座机电话号码8899 Corporate finance 11 Corporate finance 11 CCoorrppoorraattee ffiinnaannccee 1111 1 Fixed incomepaper Introduction Introduction IInnttrroodduuccttiioonn Convertible bond is bond which’s issued by firms according to the law and can be converted into common stocks of the issuing company within a certain period. Convertible bonds share both characteristics of bonds and stocks, it is primarily a fixed-income securities, with defined deadlines and coupon rate; within the conversion period, holders of convertible bonds can be converted into shares, resale or simply hold until maturity date. If the holders of convertible bonds failed to convert the bond into stock, bond issuer will pay interest periodically and repay all principal at maturity date. Since 1843 the worlds first convertible bond was launched in the United States, the investors are increasingly familiar with convertible and has been widely invested all over the world. In recent years, the national economy maintained a steady and rapid growth, convertible bonds has become an important financing tool for listed companies and the majority of investors who are concerned about investment products. Since convertible bonds shares many characteristics of stocks, options , so the pricing of convertible bond has been one of the hottest issues of the world. Pricing theory for convertible bond Pricing theory for convertible bond PPrriicciinngg tthheeoorryy ffoorr ccoonnvveerrttiibbllee bboonndd Since convertible bonds shares many characteristics of