1. Suppose that Johns Charcoal Companys book balance sheet is:

Johns Charcoal Company (Book Values):

Net Working Capital 800 1200 Debt

Net Fixed Assets 1600 1200 Equity (net worth)

Total Assets 2400 2400 Total Value

The debt has a one-year maturity and a promised interest payment of 9%. Thus, the promised payment to Johns creditors is $1,090. The market value of the assets is $1,200 and the standard deviation of asset value is 45% per year. The risk-free interest rate is 9%. Calculate the value of Johns debt and equity. (Do not round intermediate calculations. Round your answers to the nearest whole number.)

a. Value of Equity =

b. Value of Debt =