BPI is a renewable energy company. It

has assets whose market value in one year's time will be $$60$m with a $60\%$ probability

a $60\%$ probability or $$30$m with a $40\%$ probability. BPI has a

cost of capital of $8\%.$ The risk$-$free interest rate is $4\%.$

a$.$ Calculate the market value of BPI's shares if the company has

no debt?

b$.$ In the event that BPI has to repay $$30$m $($debt$)$ in

in $1$ year, determine the value of its shares?

c$.$ Calculate the profitability expected by BPI's shareholders if

the company is debt$-$free?

d$.$ Calculate the minimum profitability that BPI's

BPI shareholders if the company is debt$-$free?

e$.$ Calculate the minimum profitability that BPI's

BPI shareholders if the company is in debt?