A firm has an investment opportunity, which generates a return of 12 million for an investment of 11 million. The firm is currently 100 per cent equity financed and it has 1 million shares outstanding. It has assets in place that have a value only known to the firm's managers who is assumed to act in shareholders' interests. The financial market believes there is a 50 per cent chance that the assets are good and worth 16 million and 50 percent chance that they are worth only 4 million. If the firm can only issue equity to finance the investment, what strategies will be followed by managers of good and bad firms respectively? Why? (Hint: detail exactly how shareholder's wealth is affected).