mu = 0.12;          %monitoring cost
sigma = 0.28;       %std dev lognormal
pibar = 0.9728;     %survival probability

F = 0.0075;         % quarterly default rate
[omegabar_D] = threshold_D(0.0075, 0.28);       % function used to find threshold omegabar

gamma = normcdf((log(omegabar_D)+0.5*sigma^2)/sigma - sigma) + omegabar_D*(1-normcdf((log(omegabar_D)+0.5*sigma^2)/sigma));

A = (1-mu)*normcdf((log(omegabar_D)+0.5*sigma^2)/sigma - sigma) + omegabar_D*(1-normcdf((log(omegabar_D)+0.5*sigma^2)/sigma));

gammaprime = 1 - F;
gprime = omegabar_D - normpdf( (log(omegabar_D)+0.5*(sigma)^2) / sigma );
lambda = gammaprime / (gammaprime - mu*gprime);

s = lambda / (1 - gamma +lambda*A);        % equation A.1

k = 1 + (lambda*A)/(1-gamma);              % equation A.2