The assets of a firm SKIP are today worth 100 mil. You reasonably feel that in a year they will be either worth 110 mil or 90 mil. You also know that a treasury bill maturing in one year is offering today a yield of 5%. The firm has a zero-coupon bond that matures in one year and has a face value of 100 mil.

What should be the value of this corporate bond today?

What should be its yield to maturity? What should be the value of the equity of the firm?

Can you do a further analysis of this problem?