| Summary: | 碩士 === 國立高雄第一科技大學 === 財務管理研究所 === 102 === Convertible bonds can set conversion price (CP) reset clause containing general CP downward resetting and special CP downward resetting. When a corporate full of excessive debt, and corporate’s operating cash flow is decreasing at the same time, by resetting CP conversion price will ease the pressure for debt repayment, but will dilute stockholder’s earnings per share. Empirical results are that the reaction of market is positive after corporate using general CP downward resetting for CB and negative after using special CP downward resetting. Result to ECB is opposite. In the event study of short sales, after using CP downward reset clause, the trend of CASS is upward either CB or ECB. In regression analysis, resetting magnitude is positive to dependent variable, debt ratio is negative to CAR, and insider holding rate is negative to CASS.
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