# Evaluation of equity-based debt obligations

@article{Fromm2019EvaluationOE, title={Evaluation of equity-based debt obligations}, author={A. Fromm}, journal={arXiv: Pricing of Securities}, year={2019} }

We consider a class of participation rights, i.e. obligations issued by a company to investors who are interested in performance-based compensation. Albeit having desirable economic properties equity-based debt obligations (EbDO) pose challenges in accounting and contract pricing. We formulate and solve the associated mathematical problem in a discrete time, as well as a continuous time setting. In the latter case the problem is reduced to a forward-backward stochastic differential equation… Expand

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