Buckeye Industries has a bond issue with a face value of $1,000 that is coming due in one year. The value of Buckeyes assets is currently $1,120. Luke Fickell, the CEO, believes that the assets in the firm will be worth either $950 or $1,410 in a year. The going rate on one-year T-bills is 5 percent.

a-1	What is the value of Buckeyes equity? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Value of equity

$

a-2	What is the value of the debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Value of debt

$

Suppose Buckeye can reconfigure its existing assets in such a way that the value in a year will be $830 or $1,630.

b-1	If the current value of the assets is unchanged, what is the value of Buckeye's equity? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Value of equity

$