A company has a single zero coupon bond outstanding which matures in 10 years with a market value of $25m. The current value of the company’s assets is $21m, and the standard deviation of the return on the firm’s assets is 47 percent per year. The risk free rate is 6 percent per year, compounded continuously. 1) Use the Black-Scholes model to determine the value of the company’s equity. {Hint: You may use the option calculator your team developed in this course. Clearly identify the parameters of the model. Certain parameters are keys to the problem and thus carry significantly higher weights than others.}(15 points) 2) The company has a new project available. The project has an NPV of $2.3m. If the company undertakes the project, what will be the new market value of equity? Assume volatility is unchanged. {Hint: Clearly identify and explain how you change the parameters of the model to account for the project’s NPV. This is the key to this question. The outcome of the model is garbage if this is wrong. In other words, you will be severely penalized if you are handling the NPV incorrectly in the model.} (15 points) 3) Does all of the project’s NPV accrue to shareholders? Why? Why not? Explain.