Contingent claims approach Wide spread use of the option pricing theory for pricing convertibles The underlying state variable is issuer's frim value process. The firm value is not the total value of assets owned by the firm. It is the takeover value when the firm is sold Overall assessment of the price impact of different features in a convertible10 Contingent claims approach Wide spread use of the option pricing theory for pricing convertibles. The underlying state variable is issuer’s frim value process. The firm value is not the total value of assets owned by the firm. It is the takeover value when the firm is sold. Overall assessment of the price impact of different features in a convertible