3. Assume in a company there is debt with a face value of 30, and that investors must agree to choose between one of two projects. The chosen project will generate the following rents one year later: Rents, one ear later Pro'ectA safe _ Project B (risky) 120 with _- rob. 30% 2G with web. ?0% a} What is the expected value of each project, and which one maximizes de value of the rm? b} Which project do creditors prefer? And which one do shareholders prefer? Is there a conflict of interests between the two? c} Suppose now that the face value of debt is TD. Answer question b} again. cl} If you were the social planner. to whom would you like to allocate the decision rights in the company? Is this what happens in reality? What do governments andfor investors do in order to avoid this type of conicts of interest