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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Description/Abstract
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.
| Item Type: | Article |
|---|---|
| ISSNs: | 0306-686X (print) |
| Related URLs: | |
| 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 |
| Item ID: | 36841 |
| Date Deposited: | 20 Mar 2007 |
| Last Modified: | 02 Mar 2012 13:07 |
| Contributors: | Casson, Peter (Author) |
| Date: | 1998 |
| Status: | Published |
| URI: | http://eprints.soton.ac.uk/id/eprint/36841 |
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