Escuela de Finanzas, Economía y Gobierno

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Financial behaviour in a mandatory conversion process: a case study
(Universidad EAFIT, 2018) Acosta García, Maria Isabel; Villa García, Ramón Eduardo; Gonzalez Ruiz, Juan David
Bonds are a tool that many companies have used to acquire capital. They may be attractive because of the alternatives they offer to both, companies and investors. This article describes what happens to the economic Value Added (EVA) observed by investors when they are involved as shareholders of a company issuing mandatory convertible bonds. Few specific literature sources were found including uncertainties for the shareholders. The paper analyses what happens to the EVA before, during and after the issuance of the mandatory conversion of a Colombian company. It was observed that although there was not a noticeable improvement in the EVA, the capital structure of the company improved.