Discussion: Analyzing Convertible Bonds

Abstract

The valuation of realistically complicated corporate liabilities is arguably one of the most exciting fields in finance today. It is exciting because it seems quite feasible that what was once a somewhat esoteric body of theory may soon be a viable method of valuing actual securities of many kinds. (This promise was, of course, clearly seen at the outset by both Black and Scholes and Merton in their respective seminal papers.)