Analyzing Convertible Bonds
Michael J. Brennan, Eduardo S. Schwartz
Journal of Financial and Quantitative Analysis · 1980 · Volume 15 · Issue 4
Abstract
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.
Enable JavaScript for citation tools and additional paper interactions.