Gladstone Corporation is about to launch a new product. Depending on the success of the new product, Gladstone may have one of four values next year: $$150$ million, $$139$ million, $$93$ million, and $$75$ million.

These outcomes are all equally likely, and this risk is diversifiable. Gladstone will not make any payouts to investors during the year. Suppose the risk$-$free interest rate is $5\mathrm{.}2\%$ and assume perfect capital markets.

a$.$ What is the initial value of Gladstone's equity without leverage?

Now suppose Gladstone has zero$-$coupon debt with a $$100$ million face value due next year.

b$.$ What is the initial value of Gladstone's debt?

c$.$ What is the yield$-$to$-$maturity of the debt? What is its expected return?

d$.$ What is the initial value of Gladstone's equity? What is Gladstone's total value with leverage?