Consider a simple firm that has the following market-value balance sheet Assets Liabilities & Equity $1,050 Debt $400 650 Equity Next year, there are two possible values for its assets, each equally likely: $1,190 and $970. Its debt will be due with 4.8% interest. Because all of the cash flows from the assets must go either to the debt or the equity, if you hold a portolio of the debt and equity in the same proportions as the firm's capital structure, your portfolio should earn exacty the expected return on the firm's assets. Show that a portfolio invested 38% in the firm's debt and 62% in its equity will have the same expected retum as the assets of the firm. That is, show that the firm's WACC is the same as the expected return on its assets. Round to one decimal place. If the assets will be worth $1,190 in one year, the expected return on assets will be If the assets will be worth $970 in one year, the expected return on assets will be The expected return on assets will be For a portfolio of 38% debt and 62% equity, the expected return on the debt will be If the equity will be worth $770.80 in one year, the expected return on equity will be If the equity will be worth $550.80 in one year, the expected return on equity will be The expected return on equity will be %. (Round to one decimal place.) % Round to one decimal place.) (Round to one decimal place.) (Round to one decimal place.) Round to one decimal place.) Round to one decimal place.) % The expected pre-tax return on a portfolio of 38% debt and 62% equity will be rounding.) % Round to one decimal place. There may be a slight difference due to