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Green Mfg is about to launch a new product. Depending on the success of the new product, they will have one of four values next

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Green Mfg is about to launch a new product. Depending on the success of the new product, they will have one of four values next year: $153 million, $140 million, $99 million, and $78 million. These outcomes are all equally likely, and this risk is diversifiable. Suppose the risk-free interest rate is 5% and that, in the event of default, 25% of the value of their assets will be lost to bankruptcy costs. (Ignore all other market imperfections, such as taxes.) a. What is the initial value of Green's equity without leverage? Now suppose Green has zero-coupon debt with a $100 million face value due next year. b. What is the initial value of Green's debt? c. What is the yield-to-maturity of the debt? What is its expected return? d. What is the initial value of Green's equity? What is Green's total value with leverage? a. The initial value of Green's equity without leverage is $ million. (Round to two decimal places.) b. The initial value of Green's debt is $ million. (Round to two decimal places.) c. The yield-to-maturity is The expected return is %. (Round to two decimal places.) %. (Round to the nearest integer.) d. The initial value of Green's equity with leverage is $ million. (Round to two decimal places.) Green's total value with leverage is $ million. (Round to two decimal places.)

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