niggs bassoon corporation is a custom manufacturer UI Bassoons and oiler wind Instruments. Its current value of operations, which is also its value of debt plus equity, is estimated to be $200 million. Higgs has $110 million face value, zero coupon debt that is due in 3 years. 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 the value of their investment. a. Using the Black-Scholes Option Pricing Model, how much is the equity worth? Black-Scholes Option Pricing Model Total Value of Firm 200.00 this is the current value of operations Face Value of Debt 100.00 Risk Free rate 5% Maturity of debt (years) 3.00 Standard Dev. 0.45 this is sigma--also known as volatility 1.4715 use the formula from the text d, 0.6920 use the formula from the text N(d,) 0.9294 use the Normsdist function in the function wizard N(d,) 0.7555 Call Price = Equity Value $ 120.85 million