*Answer MUST contain excel formula/function. List below

Your boss now wants you to help Higgs Bassoon Corporation. Higgs Bassoon Corporation is a custom manufacturer of bassoons and other wind instruments. Its current value of operations, which is also its value of debt plus equity, is estimated to be $200 million. Higgs has zero coupon debt outstanding that matures in 3 years with $110 million face value. The risk-free rate is 5%, and the standard deviation of returns for similar companies is 60%. The owners of Higgs Bassoon view their equity investment as an option and would like to know its value. Start with the attachedpartial model, and answer the following questions:

H I J K L 30 31 c. How much would the equity value and the yield on the debt change if Fethe's 32 management were able to use risk management techniques to reduce its volatility to 33 45 percent? Can you explain this? 34 35 Equity value at 60% volatility 36 Equity value at 45% volatility 37 Percent change million million million d. Graph the cost of debt versus the face value of debt for values of the face value from $0.5 to $8 million. Cost of Debt 42 Face Value of Debt hint: use a data table 10 100 110 120 130 140 150 160