StangWay Corp. stock is trading for $23 per share. StangWay has 24 million shares outstanding and a market debt-equity ratio of 0.59. StangWay's debt is zero coupon debt with a 5-year maturity and a yield to maturity of 9% EAR (effective annual rate). a. Describe StangWay's equity as a call option. What is the maturity of the call option? What is the market value of the asset underlying this call option? What is the strike price of this call option? b. Describe StangWay's debt using a call option.

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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: