2. There are no corporate taxes in this question. F's operating value of assets in one year can be high ($5 million) or low ($2 million) with equal probability. F has debt, face value $3 million, maturity one year, coupon 5%, risk B = 0.1. Market value B of F's debt is $2.3 million, risk-free rate is 3%, expected return of the market portfolio is 8%. F goes bankrupt only if the market value of its assets is lower than the claim of debtholders. Compute bankruptcy costs (i.e. percentage of asset's operating value lost in liquidation).