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Firm issues debt with face value D at time 0. The debt matures at time T.
At time T if the assets of the firm are greater than the value of the debt (V>D)
The shareholders have an in-the-money call They will pay the bondholders and call in the assets of the firm
At time T if the assets of the firm are less than the value of the debt (V<D)
Shareholders have an in-the-money put. They will put the firm to the bondholders. Payoff to Bondholder = D-V