In one year: DEBT Firm XYZ will earn $110 if its businesses perform well. The Firm owes a $60 payment to its creditors in one year. If the Firm's businesses perform poorly next year, then its earnings will only be $90. In this case, its payment to the creditors will be $50 because of the direct costs of bankruptcy. The chance that the Firm's businesses will perform well or poorly in one year equals 50%. The interest rate on the Firm's debt is 4%. The creditors are fully aware of these possible future outcomes. How should they evaluate this debt? To answer this question, first, the math shows that the creditors expect to receive [ Select) from the Firm next year. Then, one can calculate that the current value of debt equals [Select] HINT: You won't need to use all the numbers that are given in this problem! If the Firm's businesses perform poorly ne its earnings will only be $90. In this case, its pay will be $50 because of the direct costs of bankru The chance that the Firm's businesses will perform year equals 50%. The interest rate on the Firm's det The creditors are fully aware of these possible futur should they evaluate this debt? To answer this ques shows that the creditors expect to receive [ Select from the Firm next [ Select $ 45.00 of debt equals $ 47.50 $ 52.50 HINT: You won't n $ 55.00 $ 57.50 roblem! Previous a L F G F5 F6 F7 FI its earnings will only be $90. In this case, will be $50 because of the direct costs of The chance that the Firm's businesses will per year equals 50%. The interest rate on the Firm The creditors are fully aware of these possible should they evaluate this debt? To answer this shows that the creditors expect to receive Select) from the Firm calculate that the current value of debt equals Select or HINT: You wc [Select ] $42.06 roblem! $ 45.24 $48.61 $ 51.80 $ 52.88 Previous o O - c F4 DIG F5 F6 F7