A project costs $100 today to finance and pays off (next period) $140 with probability 1/2, $100 with probability 1/4, and $50 with probability 1/4. Assume the time-premium is 10%. Assume capital markets are perfect and all investors are risk-neutral. If a manager (of the project) wants to partly finance the project with a S50 bond, what promised rate of return must he(she) offer? What is the face value of the bond? If a manager wants to (fully) finance the project with a S100 bond, what must be the promised rate of return? What would be the face value of the bond? Is this a viable method of financing the project? Now assume the manager chooses to finance the project with a mixture of debt vs. self-financing, i.e. equity. What is the optimal (profit-maximizing) mix of debt and equity