Financial instruments can be real or virtual documents representing a legal agreement involving any kind of monetary value. Equity-based financial instruments represent ownership of an asset. Debt-based financial instruments represent a loan made by an investor to the owner of the asset. Our services cover the following instruments:
IFRS 13
Fair Value Measurement
IFRS 9
Financial Instruments
IFRS 2
Share-based Payment
IAS 32
Financial Instruments: Presentation
IAS 39
Financial Instruments: Recognition and Measurement
Convertible Bonds Valuation
A convertible bond is a type of debt security that can be converted into a predetermined amount of the underlying company’s equity at certain times during the bond’s life, usually at the discretion of the bondholder. Convertible bonds are a flexible financing option for companies and are particularly useful for companies with high risk/reward profiles.
Input Variables:
- Stock Price
- Stock Dividend
- Convertible Market Price
- Maturity (Years)
- Conversion Price
- Conversion Ratio = Convertible Market Price / Conversion Price
- Stock Dividend Yield = Stock Dividend / Stock Price
- Conversion Value = Stock Price / Conversion Ratio
Employee Stock Options (“ESO”)
ESO is usually priced by using a lattice-based model, which takes into account expected changes in various parameters over an option’s life, thereby producing a more accurate estimate of option prices than created by models that consider only one point in time. If it also common for companies planning for IPO to issue stock options to motivate their contributors. We also pay special attention to the major variables: