Could you please calculate the hedged & unhedged value of debt in the following question?

I am having trouble calculating the hedged & unhedged value of debt for the following question:

Consider the junior gold mining firm Pure Gold, which expects to extract 5,000 ounces of gold next year, and pay out a liquidating dividend. The firm has zero-coupon debt with a face value of $3.57 million, it pays a 40% corporate tax rate on net income above its $4 million depreciation expense and its interest expense equal to the face value minus the present value of the debt, and it has extraction costs of $400 per ounce. Management estimates the annual expected return, volatility, and skewness for gold to be 10%, 20%, and 0 respectively. The current one-year forward price of gold is $1,260 per ounce and the convenience yield on gold is currently 0. The risk-free rate is 5% per year (CCR). (Assume all revenues and costs occur at the end of the year.)

I am attaching a similar question that my professor used as an example.

Thanks in advance!

2. Reconsider the junior gold mining company, SKGX Inc, which expects to extract 100,000 ounces of gold next year (after which the mine will be exhausted. The price of gold is as- sumed to be either $1,000 or $1,500 per ounce next year. The forward price is $1,300, the risk-free rate is 5% per year EAR, and extraction costs are $500 per ounce. This time assume that the company pays 40% tax on the taxable income, which is the net income less the de preciation expense of $75 million, less the interest expense from interest on its debt (with face value $55 million). Interest equals the face value paid minus the present value of the debt. a. What is the hedged and unhedged value of the firm? COMM 419-Assignment 3-Due Wednesday, December 4 In the previous question we found the value of debt was: Dhedged $52.38 and Dun. hedged $50.48 million. After taxes, the hedged cash flow is 130-50-taxes. Taxable income is 130-50-75-interest. Interest is 55 52.38 2.62 million, so taxable in- come is 2.38 million, and therefore taxes are 2.38 x 0.4 0.95 million. Therefore the hedged value is (130-50-0.95)/1.05 $75.28 million. The after-tax unhedged cash flow in the low-price state is just $50 million, since the cash flow is less than the de- preciation expense, so taxes are zero in that case. In the high-price state it is 150-50 (150 50 75 (55 50.480) x 0.4 $91.81 million. The unhedged value is (91.81 x 0.6 50 x 0.4) 1.05 $71.51 million. 2. Reconsider the junior gold mining company, SKGX Inc, which expects to extract 100,000 ounces of gold next year (after which the mine will be exhausted. The price of gold is as- sumed to be either $1,000 or $1,500 per ounce next year. The forward price is $1,300, the risk-free rate is 5% per year EAR, and extraction costs are $500 per ounce. This time assume that the company pays 40% tax on the taxable income, which is the net income less the de preciation expense of $75 million, less the interest expense from interest on its debt (with face value $55 million). Interest equals the face value paid minus the present value of the debt. a. What is the hedged and unhedged value of the firm? COMM 419-Assignment 3-Due Wednesday, December 4 In the previous question we found the value of debt was: Dhedged $52.38 and Dun. hedged $50.48 million. After taxes, the hedged cash flow is 130-50-taxes. Taxable income is 130-50-75-interest. Interest is 55 52.38 2.62 million, so taxable in- come is 2.38 million, and therefore taxes are 2.38 x 0.4 0.95 million. Therefore the hedged value is (130-50-0.95)/1.05 $75.28 million. The after-tax unhedged cash flow in the low-price state is just $50 million, since the cash flow is less than the de- preciation expense, so taxes are zero in that case. In the high-price state it is 150-50 (150 50 75 (55 50.480) x 0.4 $91.81 million. The unhedged value is (91.81 x 0.6 50 x 0.4) 1.05 $71.51 million