DigiTek is a start-up company financed with 50% debt and 50% shareholders' equity. The debt outstanding is a zero-coupon bond which has a face value of $1,000,000 and a remaining maturity of two years. The following table presents a summary of the company's balance sheet (in book values): Net working capital $500,000 Total debt $1,000,000 Fixed assets $1,500,000 Net equity $1,000,000 Total assets $2,000,000 Total debt and equity $2,000,000 The company's total assets has a market value of $1,200,000. The annualized standard deviation of the asset value is 45%, and the risk-free rate is 3%. a) Calculate the market value of DigiTek's shareholders' equity. [8 marks] b) Calculate the value of DigiTek's outstanding debt. [2 marks]