IS THE DANISH MARKET FOR CONVERTIBLE BOND S EFFICIENT

Correct pricing of convertible bends is extremely complicated for seve ral reasons. Usually, the issuer has a right to call the bond prematur ely combined with a right for the owner in a short time period to choo se to convert the bond into stock instead. Furthermore, for reasons no t very well understood the issuer does not allways call as soon as exp ected. Use of international software to compute for Danish convertible bonds is doubtful, if the programs ave not modified to correct for th e Danish Tax code. Such corrections are not made. The article argues t hat the Danish market for convertible bonds seems to be rather ineffic ient.