QUESTION 6 Assume a world without taxes. A firm has the following parameters: market value V = $4,000,000, face value of debt D = $2,800,000 and instantaneous standard deviation of the firm assets is 20%. The debt matures in T = 8 years. The debt is a zero-coupon bond, and the firm has a policy of not paying cash dividends. The risk-free rate is 6%. Required Use option pricing analysis to: i. Calculate market values of equity (S) and debt (B). Define and calculate the firm's probability of default. (15 marks]