4. Company X has the following financial structure at time 0: Debt $3m (current book value) Equity $6m (issued share capital) The debt is a zero-coupon bond with face value $5m that is repayable at par at time 10. There are 400,000 shares in circulation. (i) Explain how the Merton model could be used to value shares in Company X. (ii) Assuming that the debt is repaid directly from the company's funds at that time, state the share price at time 10 if the total value of Company X at that time is: (a) $15m (b) $4m 4. Company X has the following financial structure at time 0: Debt $3m (current book value) Equity $6m (issued share capital) The debt is a zero-coupon bond with face value $5m that is repayable at par at time 10. There are 400,000 shares in circulation. (i) Explain how the Merton model could be used to value shares in Company X. (ii) Assuming that the debt is repaid directly from the company's funds at that time, state the share price at time 10 if the total value of Company X at that time is: (a) $15m (b) $4m