Overhang Development Corp., currently has assets with a market value of $100. Next year the market value of Overhang Development's assets is going to increase by 10% or decrease by 30% depending on the state of the economy. The annual risk-free rate of interest is 0%. Overhang Development Corp. has one share of equity issued and outstanding as well as one zero-coupon corporate bond outstanding with a face value of $100 which matures next year and is neither callable/puttable nor convertible.

(a) (5 points) Find:

(i) (2 points) the intrinsic value of Overhang Development's corporate bond;

(ii) (1 point) the intrinsic value of the equity share;

(iii) (1 point) the promised yield to maturity of the corporate bond;

(iv) (1 point) the credit spread of the corporate bond.