ation bought a put option on XYZ Corp. P5,000,000-face value bonds for a premium of P25,000. The strike price is P5,100,000. 1. If on the exercise date of the option, the bonds were selling at P5,060,000, how much is the net gain/(loss) based on the information above? 2. If on the exercise date of the opti
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
ABC Corporation bought a put option on XYZ Corp. P5,000,000-face
1. If on the exercise date of the option, the bonds were selling at P5,060,000, how much is the net gain/(loss) based on the information above?
2. If on the exercise date of the option, the bonds were selling at P5,200,000, how much is the net gain/(loss) based on the information above?
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