A genry Cost Consider a project. (Assume that the manager will make a decision to maximize the shareholder's value.) The cost to take the project = $100 million The cost to take the project is paid by shareholders. Firm value without project State Normal Boom Probability of the state 0.7 0.3 Firm value $200 million $500 million Firm value with project State Normal Boom Probability of the state 0.7 0.3 Firm value $400 million $700 million For the manager to take the project, what is the maximum debt amount? 16 exeter are 1. None of the answers are correct. stock holten 2. $352.86 million O o- (sto 3. $332.86 million 4. I don't know the answer. Without S B v S B 200 200m 6.7 09 700 700 N B Bo) sko 100 % 03 5oom 400 300 100 o 200 PV = noo Do 600 100 61% 4-22