A new project has the following success probabilities: Assume risk neutrality. If a bond with $100 face value collateralized by this project promises an interest rate of 8%, then what is the prevailing cost of capital, and what do shareholders receive if the buyout materializes? You are attempting to decide if a particular retail stock, trading at $20, is priced appropriately. You know with certainty there is a 24% chance the company will have a booming sales year, driving the stock price to $45. You also know there is 50% chance sales will stagnate, keeping the stock price at $20. Lastly, there is a 26% chance the company will lose market share to a new competitor this year, driving the price down to $10. Is there an opportunity for expected gain in this stock, and if so, how much (i.e., report the net gain if so, 0 otherwise)? A \$16 stock has the following probability distribution with associated outcomes after 1 year: $12 with prob 10%;$15 with prob 20%; $16 with prob 40%;$18 with prob 20%; and $20 with prob 10%. What is the expected value of the stock price at the end of year 1 ? If the prevailing interest rate is 2%, is this a good investment? Report the positive difference between the expected stock price and how much you would have if you invested the money at the fixed interest rate