| Summary: | 碩士 === 國立成功大學 === 財務金融研究所 === 93 === Although some papers have discussed the issuance of convertible bonds by companies in Taiwan, they only focused on the financial factors of issuers and their sample only comprise convertible bonds or European convertible bonds. Moreover, there are many new issuances of convertible bonds surging during 2003 to 2004. Are the influential factors of the decision made by these issuers and the announcement effect on stock price same as previous ones? We want to investigate this topic by covering more samples.
Does the motivation of convertible bond issuance contain the insiders’ selfish motivation? A malfunctioned board of directors may make financing decision which is harmful to shareholders’ interest. Hence, we will examine if the non-financial factors of corporate governance have impact on the decision of issuing convertible bonds.
This research includes two parts. One is to use logistic regression to investigate the characteristics of convertible bond issuers. The other is to use event study method and Ohlson model to inspect the impact of convertible bond issuance announcement on stock price.
The empirical results show that market-to-book ratio and long-term debt ratio have significant impact on both CB and ECB issuance. Besides, among four non-financial variables, only stock holding ratio by institutional investors reach 10% significant level for CB issuance. When the CAR (0,1), CAR (-1,0) and CAR (-1,1) of the announcement of CB and ECB issuance are compared to paired sample without issuance of CB and ECB, we find only CAR (-1,0) of the announcement of CB is significantly positive, which confirm the result of Ohlson model that the announcement of convertible bond issuance is a good news for investors in Taiwan..
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