need help! Thanks!

a) Firm CDE is considering borrowing $500 million to fund a new product line. Given investors' uncertainty regarding its prospects, Firm CDE will pay a 7% interest rate on this loan. The firm's management knows, that the actual risk of the loan is extremely low and that the appropriate rate on the loan is 5%. Suppose the loan is for four years, with all principal being repaid in the fourth year. If Firm CDE's corporate tax rate is 21%, What is the net effect of the loan on the value of the new product line? b) Firm CDE has zero coupon debt wih a face value of $10 million due in 3 years, and no other debt outstanding. The risk-free rate is 4%, but due to default risk the yield to maturity on the debt is 10%. Firm CDE's manager believes that in the event of default, 10% of the losses are attributable to bankruptcy and distress costs. Estimate the present value of the distress costs