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Mastering Python for Finance - Second Edition
book

Mastering Python for Finance - Second Edition

by James Ma Weiming
April 2019
Intermediate to advanced
426 pages
11h 13m
English
Packt Publishing
Content preview from Mastering Python for Finance - Second Edition

Convertible bonds

Convertible bonds are issued by companies and contain an embedded option that allows the holder to convert the bond into a number of shares of common stock. The amount of shares to be converted for a bond is defined as the conversion ratio, which is determined such that the dollar amount of shares is the same as the value of the bond.

Convertible bonds have similarities with callable bonds. They allow the bond holders to exercise the bond for an equivalent amount of shares at the specified conversion ratio at agreed times. Convertible bonds typically issue lower coupon rates than non-convertible bonds, to compensate for the additional value of the right to exercise.

When convertible bond holders exercise their rights into ...

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Publisher Resources

ISBN: 9781789346466