Irrelevant Answers and Convertible Bond Value Deviation Ratio: Empirical Evidence from Online Roadshows in China

Abstract

Convertible bonds attain the maximum value through their potential conversion into shares of the issuing company. Nevertheless, variations in the value of convertible bonds are common, influenced by a magnitude of factors, such as changes in market interest rates, stock price fluctuations, the financial health of the company, and overall economic conditions. Our evidence suggests during the roadshows for convertible bonds, management’s irrelevant answers may increase the deviation rate of the convertible bond value. If the level of specialization in investors’ inquiries exceeds that of the management’s responses, this positive outcome becomes more pronounced.

Keywords: Irrelevant Answers, External Investors' Questioning Specialization, Management's Answer Specialization, Convertible Bond Value Deviation Ratio