1a Suppose you borrow $56018.69M when financing a gym with a cost of $87385.93M. You expect to generate a cash flow of $60859.19M at the end of the year if demand is weak, $95857.74M if demand is as expected and $114974.72M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 5.80% (risk of debt) and there's a 12.35% risk premium for the risk of the assets. What should the value of the equity be?

(HINT: If you need it, to compute the WACC of the firm, add the risk free plus the risk premium)

1b Suppose you borrow $61798.92M when financing a gym with a cost of $85294.78M. You expect to generate a cash flow of $77712.86M at the end of the year if demand is weak, $90342.59M if demand is as expected and $102924.63M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 4.62% (risk of debt) and there's a 9.58% risk premium for the risk of the assets. What is the expected return of equity?

1c Suppose you borrow $61172.93M when financing a gym with a cost of $94922.82M. You expect to generate a cash flow of $51112.14M at the end of the year if demand is weak, $86353.72M if demand is as expected and $110491.70M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 5.48% (risk of debt) and there's a 10.84% risk premium for the risk of the assets. What would be the realized return of equity if the demand is strong?

1d Suppose you borrow $45271.58M when financing a gym with a cost of $94520.51M. You expect to generate a cash flow of $66375.12M at the end of the year if demand is weak, $97435.67M if demand is as expected and $122961.98M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 5.53% (risk of debt) and there's a 10.37% risk premium for the risk of the assets. What would be the realized return of equity if the demand is weak?