Global Real Estate Partners, LTD., is undertaking a new project. If the project is successful, the value of the firm in a year will be \($650\) million, but if it turns out to be a failure, the firm will be worth only \($250\) million. The current value of the firm is \($400\) million. The firm has outstanding bonds due in a year with a face value of \($300\) million.

The T-bill rate is 7 percent. What is the value of the equity? What is the value of the debt?