Firms do not pay corporate taxes, everyone is risk-neutral (the discount rate is always equal to the risk-free rate) and the risk-free rate is 5%. There are two types of firms in an industry (in equal proportions) H-firms will generate a single cash-flow of 50 in one year, L-firms will generate a single loss of 15 (i.e. a cash-flow of -15). Firms are all-equity and can implement a project P that costs 20 and generate 30. Suppose that only existing shareholders (insiders) know the type of the firm, whereas potential outside investors can't distinguish between H- and L-firms (asymmetric information).

What is the NPV of P? Will H-firms finance P with equity?

Assume that H-firms do not issue equity. Will L-firms finance P with equity (you can assume it's impossible to give more than 100% of future cash-flows to external investors)?