Carlson Co. is a manufacturing firm. Carlson Co.s current value of operations, including debt and equity, is estimated to be $35 million. Carlson Co. has $14 million face-value zero coupon debt that is due in two years. The risk-free rate is 5%, and the volatility of companies similar to Carlson Co. is 60%. Carlson 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 ability to make the decision of whether to pay or not looks very much like an option