Cladstone Corporation is about to launch a new product. Depending on the success of the new product, Gladslone may have one of four values next year $151 milion, $131 milion, $100 million, and $84 milion. These oulcomes are al equally ikely, and this disk is diversifiable. Suppose the risk-free intorest mite is 5% and that, in the evert of defaut, 23% of the value of Gladstone's assets will be lost to bankruptcy costs. (lgnore at other market imperfectons, such as taxes.) a. What is the initial value of Gladstone's equity without kverage? Now suppose Gladstone has zero-coupon debt wath a $100 milion tace value due next year. b. What is the initial value of Giadsione's debt? c. What is the yield-to-maturity of the debr? What is its expected retum? d. What is the iritiol value of Gladstone's equaty? What is Gladstone's total value with levernge? Suppose Gladstone has 10 million shares cutstanding and no debt at the siart of the year. 6. If Gladetone does not istue debt, what is its share price? t. If Gladstone issues debt of 5100 milion due next year and uses the proceeds to repurchose sharos, what wit its ahare price be? Why does your answer difler from that in part (e)? Cladstone Corporation is about to launch a new product. Depending on the success of the new product, Gladslone may have one of four values next year $151 milion, $131 milion, $100 million, and $84 milion. These oulcomes are al equally ikely, and this disk is diversifiable. Suppose the risk-free intorest mite is 5% and that, in the evert of defaut, 23% of the value of Gladstone's assets will be lost to bankruptcy costs. (lgnore at other market imperfectons, such as taxes.) a. What is the initial value of Gladstone's equity without kverage? Now suppose Gladstone has zero-coupon debt wath a $100 milion tace value due next year. b. What is the initial value of Giadsione's debt? c. What is the yield-to-maturity of the debr? What is its expected retum? d. What is the iritiol value of Gladstone's equaty? What is Gladstone's total value with levernge? Suppose Gladstone has 10 million shares cutstanding and no debt at the siart of the year. 6. If Gladetone does not istue debt, what is its share price? t. If Gladstone issues debt of 5100 milion due next year and uses the proceeds to repurchose sharos, what wit its ahare price be? Why does your answer difler from that in part (e)