A Study on the Stock Price Effect of Convertible Bonds Redemption

Chi Xie (), Liang-jing Guo () and Chang-qing Luo
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Chi Xie: Hunan University
Liang-jing Guo: Hunan University
Chang-qing Luo: Hunan University

Chapter Chapter 3 in The 19th International Conference on Industrial Engineering and Engineering Management, 2013, pp 25-33 from Springer

Abstract: Abstract Redemption clause is an important part of convertible bonds clauses, and studying convertible bond redemption price effect is beneficial to the issuers and investors to understand the redemption clause of convertible bond. In view of this, the paper selects listed companies which called convertible bonds from 2004 to 2010 in Shanghai and Shenzhen stock exchange markets as research samples and the empirical results show that listed companies’ stock yield is significantly weaker than that of the market average level. Meanwhile, convertible bond redemption’ stock price is affected by the redemption notice period, company size, growth, financial leverage. The empirical results support the judgment of signal theory leading to convertible bond redemption price effect.

Keywords: Convertible bond redemption; Event study; Signaling hypothesis; Stock price effect (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-38442-4_3

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DOI: 10.1007/978-3-642-38442-4_3

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