The current value of the assets of Sibasa Mangoes Estate is R180m. The assets are \ financed by a mix of equity and zero-coupon debt. The current value of the zero-coupon \ debt is R85m and the final amount to be paid on maturity after six years is R110m, with \ an effective interest rate of 13%. The volatility in Sibasa Mangoes Estates asset value \ is 25%. The following is required: \ a. Compute the PD of Sibasa Mangoes Estate based on the Merton model.\ b. What is the impact if the volatility suddenly increases to 27%?