6. A firm issues a zero-coupon bond with face value 15 million that matures ten years from now. This brings the total value of the company up to 35 million. Assuming the Merton credit risk model, the value of the firm follows a Black-Scholes model with constant volatility of 20% per annum. The risk-free rate is 4% per annum compounded continuously. ) Compute the initial value of the bond. [4 marks) (ii) Compute the credit spread on the bond. [2 marks] (ii) An analyst believes that the estimate of the volatility of the firm's value is too low at 20%. How does this affect this analyst's computation of the equity value and the value of the debt? Justify your answer (5 marks