3. A company has just issued zero-coupon bonds with expiration time of 2 years and the total nominal value of 3 million. The total value of the company now stands at 4 million. A continuously compounded interest rate is 5% per annum. The total value of the company follows the Geometric Brownian motion with parameters ji = 0.4 and o =0.2. 3.a Under the Merton model, find the current value of the shareholders' equity. 3.b In 1 year time, the company's value drops by 20%. What is the proba- bility of the company's default on its obligation to bondholders. 3. A company has just issued zero-coupon bonds with expiration time of 2 years and the total nominal value of 3 million. The total value of the company now stands at 4 million. A continuously compounded interest rate is 5% per annum. The total value of the company follows the Geometric Brownian motion with parameters ji = 0.4 and o =0.2. 3.a Under the Merton model, find the current value of the shareholders' equity. 3.b In 1 year time, the company's value drops by 20%. What is the proba- bility of the company's default on its obligation to bondholders