Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 60 percent, and the probability of a recession is 40 percent. It is projected that the company will generate a total cash flow of $221 million in a boom year and $96 million in a recession. The companys required debt payment at the end of the year is $131 million. The market value of the companys outstanding debt is $102 million. The company pays no taxes.

a. What payoff do bondholders expect to receive in the event of a recession? (Do not round intermediate calculations. Enter the final answer in dollars. Omit $ sign in your response.)

Expected payoff $

b. What is the promised return on the companys debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Promised return %

c. What is the expected return on the companys debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Expected return %