Abstrak/Abstract |
The value of a corporate bond is conventionally expressed in terms of zero coupon bond. In practice, the most
common form of debt instrument is coupon bond and allows early default before maturity as safety covenant for the
bondholder. This paper study valuation for one period coupon bond, a coupon bond that only give one time coupon at
the bond period. It assumes that the model give bondholder the right to reorganize a firm if its value falls below a given
barrier. Revised first passage time approach is applied for default time rule. As a result, formulas of equity, liability, and
probability of default is derived for this specified model. Straightforward integration under risk neutral pricing is used for
deriving those formulas. For the application, bond of Bank Rakyat Indonesia (BRI) as one of the largest bank in
Indonesia is analyzed. R computing show that value of the equity is IDR 453.724.549.000.000, the liability is IDR
2.657.394.000.000, and the probability if default is 5.645305E-47 %. |