What question did this study set out to answer?

The aim is to assess how well Market Parity and Investment Value methods predict convertible bond conversions.

Earnings Per Share: An Empirical Test of the Market Parity and the Investment Value Methods.

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Empirical test shows Investment Value and Market Parity methods predict convertible bond outcomes, indicating market value influences decisions.

The aim is to assess how well Market Parity and Investment Value methods predict convertible bond conversions.
Evaluated convertible bonds using Market Parity and Investment Value methods.
Calculated market parity ratio based on the ratio of conversion value to market value.
Analyzed bonds over two periods: two weeks and two months.
Identified variability in bond ranking based on different dates using market parity method.
Confirmed Investment Value method's dependency on the estimation of market value without the conversion option.

Arnold et al. (1973) studied this question.

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Empirical test shows Investment Value and Market Parity methods predict convertible bond outcomes, indicating market value influences decisions.