A re-examination of the case for accounting separately for the debt and equity features of convertible debt.
Casson, Peter (1998) A re-examination of the case for accounting separately for the debt and equity features of convertible debt. Journal of Business Finance and Accounting, 25, (5&6), 595-612. (doi:10.1111/1468-5957.00203).
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The case for accounting separately for the debt and equity features of a convertible bond is based on two main assumptions: convertible debt can be decomposed into two, or more, fundamental financial instruments, and a convertible bond has the same economic substance as a bond with a detachable warrant. These assumptions are re-examined in this paper where it is shown that it is generally not possible to decompose a convertible bond into fundamental financial instruments, nor is it possible to form a package of a bond and a detachable warrant that replicates the character of the convertible bond.
|Subjects:||H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HB Economic Theory
|Divisions:||University Structure - Pre August 2011 > School of Management
|Date Deposited:||20 Mar 2007|
|Last Modified:||27 Mar 2014 18:23|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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