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Convertible Bonds: Markets, Motives, and Traditional Valuation

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Valuation of Convertible Bonds when Investors Act Strategically

Part of the book series: Beiträge zur betriebswirtschaftlichen Forschung ((BBFDUV,volume 110))

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Abstract

Before we analyze convertible bonds in detail, it is useful to first gain an overview of the convertible bond market and the corresponding market usance. Therefore, the main focus of this section is to consider both the development of the German convertible bond market and the prevalent characteristics of the traded bonds. For this purpose, we consider 61 convertible bonds which were issued in the German convertible bond market in the period from 1952 to 2000. The data set consists of all those convertible bonds which are contained in the “Mannheimer Anleihedatenbank”1 which is part of the Deutsche Finanz-Datenbank.

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References

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  18. Schmitt/Spaeter (2001) relate a higher firm value risk to fewer environmental protection arrangements implemented by the firm. With a similar argumentation, they can show that with convertible bonds the firm optimally chooses a lower risk level and more pollution control. Therefore, convertible bonds can represent an instrument to increase the social welfare resulting from the lower environmental pollution.

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  34. This representation corresponds to that given by Welcker (1968a), p. 19. The required arrangements of terms is presented by Welcker (1968a), p. 16.

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Authors
  1. Christian Koziol
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© 2004 Deutscher Universitäts-Verlag/GWV-Fachverlage GmbH, Wiesbaden

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Koziol, C. (2004). Convertible Bonds: Markets, Motives, and Traditional Valuation. In: Valuation of Convertible Bonds when Investors Act Strategically. Beiträge zur betriebswirtschaftlichen Forschung, vol 110. Deutscher Universitätsverlag. https://doi.org/10.1007/978-3-322-82016-7_2

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  • DOI: https://doi.org/10.1007/978-3-322-82016-7_2

  • Publisher Name: Deutscher Universitätsverlag

  • Print ISBN: 978-3-8244-9132-2

  • Online ISBN: 978-3-322-82016-7

  • eBook Packages: Springer Book Archive

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