Question 8 The Merton model of equity as a call option on the firm's assets can be used as an Not yet saved alternative method to value equity and is especially useful for firms in financial distress. Marked out of Assume that required returns are positive and the firm's debt is zero-coupon. Which of the 3.00 below statements about the Merton model is NOT correct? A financially distressed levered Remove flag firm's: Select one: a. Zero-coupon debt value (current price) will always be worth less than its face value (principal promised at maturity). b. Debt value (current price) will always be worth less than the firm's current asset value. c. Debt face value (principal promised at maturity) may be higher, equal to or less than the firm's current asset value. d. Equity value (current price) may be higher, equal to or less than the firm's current asset value. e. Equity value (current price) may be higher, equal to or less than the firm's current debt value