11. Equity as an option Strong Co. is a manufacturing firm. Strong Co.'s current value of operations, induding debt and equity, is estimated to be s35 miltion. Strong Co. has 514 milion face-value zero coupon debt that is due in two years. The risk-free rate is 5%, and the wolatility of companles similar to 5 trong Co. Is 60%. Strong Co.s performance has not been very good as compared to previous years. Because the company has debt, it will repay its loan, but the company has the option of not paying equity holders. The ablity to make the decision of whether to pay or not looks very much like an option. Based on your understanding of the Biack-Scholes option pricing model (OpM), calculate the following values and complete the table. (Note: Use 2.7183 as the approximate value of e in your calculations. Also, do not round intermediate calculations. Round your answers to two decimal piaces.) Strong Co.'s management is implementing a risk management strategy to reduce its volatility. Complete the following tabie, assuming that the go.al is to reduce Strong Co.'s volatility to 30%. Complete the following sentence, assuming that Strong Co.'s risk management strateqy is successful: If its risk management strategy is successful and 5 trong. Co. can reduce its volatility, the value of 5 trong Co's debt will , and the yalue of its stock will