A Study of Motivation of Issuing Convertible Bond

• Main Authors: Yung Chin Chen, 陳永欽
• Other Authors: C. H. Chan
• Format: Others
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/41675584888784806863

碩士 === 長庚大學 === 工商管理學系 === 98 === This research from 1990 to 2009, a sample of Taiwanese listed companies, major research companies issuing convertible bonds, in the industry characteristics, financing activities and changes in investment activities in order to understand the company's convertible bonds issued before the internet bubble and the internet bubble issued after the foam is different motives. We find out before the internet bubbles, the companies that issued the convertible bonds are high growth and large companies. Also, their investment and financing activities are higher than the industry average. The debt ratio and fixed assets ratio are no difference before bubbles happened. But after the bubbles, there debt ratio and fixed assets ratio are higher than the industry average significantly. Comparison of changes in the company before and after the dot-com bubble, the Internet bubble before the convertible bond issues in company size, future growth, investment and financing activities than after the Internet bubble was large, but after the Internet bubble, financial leverage, debt ratio, quick ratio and current ratio than before the Internet bubble to small. Mayer (1998) proves that the motivations of issuing convertible bonds are match for the requirement of follow-up investments, increasing the financial flexibility and control the overinvestment problems. After the internet bubbles, Stein (1992) and Myers and Majluf (1984) prove that issuing convertible bonds could delayed the issuance of equity and reduced the chance of financial crisis. Therefore, the companies issuing the convertible bonds are for maintain the flexibility of finance.