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Discrete Dynamics in Nature and Society
Volume 2014 (2014), Article ID 301282, 9 pages
Research Article

Valuing Convertible Bonds Based on LSRQM Method

1School of Economics and Management, Changsha University of Science and Technology, Changsha 410004, China
2Press, Hunan Normal University, Changsha 410081, China
3Business School, Hunan University, Changsha 410082, China

Received 11 March 2014; Accepted 23 May 2014; Published 24 June 2014

Academic Editor: Chuangxia Huang

Copyright © 2014 Jian Liu et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


Convertible bonds are one of the essential financial products for corporate finance, while the pricing theory is the key problem to the theoretical research of convertible bonds. This paper demonstrates how to price convertible bonds with call and put provisions using Least-Squares Randomized Quasi-Monte Carlo (LSRQM) method. We consider the financial market with stochastic interest rates and credit risk and present a detailed description on calculating steps of convertible bonds value. The empirical results show that the model fits well the market prices of convertible bonds in China’s market and the LSRQM method is effective.