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:


Fair Value Measurement


Financial Instruments


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.

Stock dividend yield =

stock dividend

stock price

Conversion ratio =

convertible market price

conversion price

Conversion value =

stock price

conversion ratio

Other Variables

stock price

stock dividend

convertible market price

maturity (years)

conversion price

  • Dividend rate
  • Liquidation preference
  • Put options
  • Cumulative versus noncumulative dividends
  • Redeemable versus nonredeemable

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:

  • strike price (K)
  • Spot price (S)
  • Time in year (days/365) (T)
  • Dividend per share (D)
  • Volatility in %
  • risk-free interest rate in %
  • Time to Dividend Payment
  • Number of steps
  • Suboptimal conditions or exercise behavior