StangWay Corp. stock is trading for $ 30 per share. StangWay has 24 million shares outstanding and a market debt-equity ratio of 0.41. StangWay's debt is zero coupon debt with a 5-year maturity and a yield to maturity of 12 % EAR(effective annual rate). Describe StangWay's equity as a call option. What is the maturity of the call option? years. What is the market value of the asset underlying this call option? $ What is the strike price of this call option? $ million (Round to 2 decimal places) (Round to 2 decimal places)

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.