Question: B Corp has a zero coupon bond that matures in 5 years with a face value of $60,000. The current value of the firms assets

B Corp has a zero coupon bond that matures in 5 years with a face value of $60,000. The current value of the firms assets is $57,000 and the standard deviation of its return is 50 % per year. The risk free rate is 6 % per year compounded continuously. A) What is the value of a risk-free bond with the same face value and maturity as the current bond? B) What is the value of a put option on the firms assets with a strike price equal to the face value of debt? C) What is the value of the firms debt?

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