Analyzing Convertible Bonds

The convertible bond is a hybrid security which, while retaining most of the characteristics of straight debt, offers, in addition, the upside potential associated with theunderlying common stock. As a quid pro quo for the upside potential the convertible bond is typically subordinated to other corporate debt and carries a lower coupon rate than would an otherwise equivalent straight bond.

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[2]  Eduardo S. Schwartz,et al.  Convertible Bonds: Valuation and Optimal Strategies for Call and Conversion , 1977 .

[3]  Jonathan E. Ingersoll,et al.  A Contingent-Claims Valuation of Convertible Securities , 1977, World Scientific Reference on Contingent Claims Analysis in Corporate Finance.