There are two firms - A and B with very similar characteristics. Both firms have the current firm value of $100, and they have to repay $70 debt in 5 years. The risk-free rate is 3% per year. The only difference is firm A's asset volatility is 20% while firm B's asset volatility is 10% per year. 2 (a) Compute the equity and debt value for both firms. (i) Which firm has a higher equity value and why? (b) Compute the probability of default for both firms. (c) Compute the debt yield and credit spread for both firms. (i) Which firm has a higher credit risk and why?