2025, Vol. 8, Issue 2

author(s)
Abdul-Aziz Shwaish Abdul-Hameed and Sabir Hamad Mahmood

abstract
This research aims to shed light on a non-traditional financing instrument and its impact on firm value, as these financial instruments combine characteristics of both debt and equity, making the assessment of their effect on firm value a complex task. The study addresses the main research question: Do convertible bonds have a positive impact on the value of companies listed on the NASDAQ index?. This question is based on the hypothesis that convertible bonds have a significant positive effect on firm value. The sample consisted of ten (10) companies listed on the NASDAQ Stock Market and other financial markets during the period (2014-2023), which issued these bonds continuously throughout the period, considering the availability of data. The study adopted a quantitative analytical methodology, using a dynamic panel data model to estimate the impact of these bonds on the market value index of the sample companies, while controlling for a number of moderating variables to reinforce the strength of the relationship. The findings contradicted the expected advantages of such instruments such as lower cost and the ability to absorb losses as the results indicated a negative effect on the market value of the companies. This suggests that these bonds sent negative signals to the market and investors regarding the future and profitability of the sample companies and possibly reflected the companies' reliance on this type of financing to meet funding needs, potentially leading to a decline in shareholders’ equity.