| Summary: | 碩士 === 國立臺灣大學 === 國際企業學研究所 === 105 === This study intends to understand investor reaction towards convertible bond issuance. Result indicates that unlike the past, there is a change in investor perception toward convertible bond issuance; it has become a positive signal, and there are significant positive CAARs at both window [-5,5] and [-1,0], especially 5 days prior to announcement date. The result shows a positive announcement effect, but reacts in advance. There are 2 possible reasons that explain the result: 1) information leakage, 2) major shareholders or company lift the stock price before the price setting base date so investors will not be able to convert easily. This study has also identified the underlying stock’s trading volume, and finds 55% of the companies have low trading volume before the event date; however, during the event date many companies have increasing volume. This means there not only exists significant abnormal return around the event date, the trading volume is also very high. And lastly it is found that company’s market value can explain the CAR at significant degree negatively.
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