StormTech has S1,000 convertible bonds with a coupon rate of 10% paid annually, that has 10 years to maturity. The bond is convertible into 30 shares of StormTech. The current interest rate on similar bonds without the convertible option is 7.3%. The current stock price of StormTech is $45. a What is the bond's straight-debt value? 5 What is StomTech bond's conversion value? S

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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: