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examination of pricing efficiency in the offering of convertible debt securities

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Date Issued:
1999
Summary:
This study evaluates the relative pricing efficiency of convertible debt offerings by comparing the wealth of the convertible bond at its termination with the termination date wealth of an equal initial investment in non-convertible debt of the same approximate risk and maturity. The comparison is made via the construct of a performance ratio. The attributes of the sample's aggregate ratio versus the expected value of the ratio, given that convertible bonds are priced efficiently, provides policy implications in the use of convertible bond financing. The thesis compares the results to prior research measuring convertible pricing efficiency and discusses the relative merit of this approach. The bond rating system, as it relates to convertible issues, is examined. The dissertation concludes by presenting the implications of the results and direction of future research in this area. The results show that convertible bonds are priced in a manner that favors the convertible investor and not the common stockholder.
Title: An examination of pricing efficiency in the offering of convertible debt securities.
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Name(s): Taylor, Don A.
Florida Atlantic University, Degree Grantor
McDaniel, William R., Thesis Advisor
Type of Resource: text
Genre: Electronic Thesis Or Dissertation
Date Issued: 1999
Publisher: Florida Atlantic University
Place of Publication: Boca Raton, Fla.
Physical Form: application/pdf
Extent: 130 p.
Language(s): English
Summary: This study evaluates the relative pricing efficiency of convertible debt offerings by comparing the wealth of the convertible bond at its termination with the termination date wealth of an equal initial investment in non-convertible debt of the same approximate risk and maturity. The comparison is made via the construct of a performance ratio. The attributes of the sample's aggregate ratio versus the expected value of the ratio, given that convertible bonds are priced efficiently, provides policy implications in the use of convertible bond financing. The thesis compares the results to prior research measuring convertible pricing efficiency and discusses the relative merit of this approach. The bond rating system, as it relates to convertible issues, is examined. The dissertation concludes by presenting the implications of the results and direction of future research in this area. The results show that convertible bonds are priced in a manner that favors the convertible investor and not the common stockholder.
Identifier: 9780599567290 (isbn), 12619 (digitool), FADT12619 (IID), fau:12615 (fedora)
Note(s): Thesis (Ph.D.)--Florida Atlantic University, 1999.
Subject(s): Convertible Securities--Prices
Convertible Bonds--Prices
Held by: Florida Atlantic University Libraries
Persistent Link to This Record: http://purl.flvc.org/fcla/dt/12619
Sublocation: Digital Library
Use and Reproduction: Copyright © is held by the author with permission granted to Florida Atlantic University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Use and Reproduction: http://rightsstatements.org/vocab/InC/1.0/
Host Institution: FAU
Is Part of Series: Florida Atlantic University Digital Library Collections.