Convertible bonds: characteristics, pricing and financing

The work focuses on the analysis of convertible bonds from the motivations of the issuance, the pricing problem and the models to appraise the convenience in issuing such assets. In particular after outlining the basic characteristics of convertibles and the main problems in pricing such assets, a comparison model with credit risk is developed in order to help managers and companies to set all the contractual features of the asset and to decide the best financing alternative. The work moreover introduces a cash flow motivation in issuing such assets that can be added to the available literature and tested empirically.