Suppose that the firm?s book balance sheet is:

Net working capital $ 400 
Debt $1,000 
Net fixed assets $1,600 
Equity (net worth) $1,000
Total assets $2,000 
Total value $2,000

The debt has a one-year maturity and a promised interest payment of 9
percent. Thus, the promised payment to creditors is $1,000. The market
value of the assets is $1,200 and the standard deviation of asset
value is 45 % per year. The riskfree interest rate is 9 percent.
Calculate the value of debt and equity.

Please try to have this answered by 10/10/05. Thank you.