Q-35. In the Merton model for credit risk, a firm's equity is treated as a call option on its assets. Assume the following parameters are given:

• Equity value (E) = $50 million

• Equity volatility (σₑ) = 40%

• Debt face value (D) = $80 million

• Risk-free rate (r) = 5%

• Time to maturity (T) = 2 years

• N(d₁) = 0.7 and N(d₂) = 0.4, where d₁ and d₂ are defined in the Merton framework.

What are the firm's asset value (V) and asset volatility (σᵥ)?