In this paper, we analyze the optimal default strategy of a firm when debt is convertible into equity. For this purpose, we consider a convertible consol bond in a timeindependent model in the presence of bankruptcy costs and tax deductibility. The optimal default and conversion strategy result...

In this paper, we characterize optimal conversion strategies and the related values of convertible bonds and stocks under a sequential conversion policy. Contrary to the existing literature, we consider firms that have both subordinated debt outstanding and convertible bonds. The additional debt...