4. a) Consider the model of Myers and Majluf (1984). Suppose that the parameters of the model have the following values: = 0.25, H = 1.25, L = 1.20, I = 1.0, R = 1.06, r = 0.05. What is the equilibrium?

b) In the model of Myers and Majluf, the condition v < s (H-L) ensures that there exists a separating equilibrium under which only firms of type L carry out the investment project. What is the condition that ensures the existence of a pooling equilibrium under which firms of type H as well as firms of types L both carry out the investment project?