A company has a project that costs $250 billion today and pays off either $175 million or $400 million next year, each with 50% probability. The company has 10 million shares outstanding, no cash on hand, and no other assets except for this potential project. Assume that there is no discounting, taxation, or direct cost of bankruptcy.

1A) Can the company finance this project with a sale of a new equity? If so, how many shares would it need to issue?

1B) Can the company finance this project with a sale of bonds? If so, what would it need to be to repay the creditors in order for the creditors to fund the project?

1C) Suppose the company has another option: mutually exclusive project that costs $375M but pays off $1.1B with 20% probability and $180M with 80% probability. At the time it raises capital, the company can't make a legally binding commitment to one of the two projects. Will the company be able to raise money by issuing debt to fund one of its projects?