Problem $24-9$ Default option

$1$ points

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Square File's assets are worth $$100.$ It has $$80$ of zero$-$coupon debt outstanding that is due to be repaid at the end of two years. The risk$-$free interest rate is $5\%,$ and the standard deviation of the returns on Square File's assets is $40\%$ per year.

Calculate the present value of the company's debt and equity.

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.

$\backslash$table$[[$Present value of the company's debt,$],[$Present value of the company's equity,$]]$