A Firm's Current Value Is $£$ 1 Billion $£$ 06 Billion

Multiple Choice

A firm's current value is $£$ 1 billion .The firm has one-year zero-coupon debt outstanding with a face value of $£$ 0.6 billion.What is the one-year "distance to default" (in the Moody's KMV approach) if the standard deviation of firm value is 30%?

A) 1.33
B) 1.71
C) 2.34
D) 3.12