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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

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 $200 million in a boom year and $91 million in a recession. The company's required debt payment at the end of the year is $125 million. The market value of the companys outstanding debt is $98 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 and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g.,1,234,567.)
b. What is the promised return on the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
c. What is the expected return on the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)

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