Information Effects of Security Issuance: Rocket Lab Case Instructions Rocket Lab USA $($RKLB$,$ Nasdaq$)$ had a market value on April $18$th $2022$ of $$3\mathrm{.}92$ billion.$$ Rocket Lab is a non$-$governmental space launch company, offering customers access to the Electron small orbital launch vehicle, which it boasts is the second$-$most frequently launched US rocket. The Electron, which boosts payloads up to $300$kg into low Earth orbit, is on the only reusable small launch vehicle in service. Rocket Lab has completed $25$ Electron launches to date, successfully deploying $112$ satellites into orbit. $($This is true; what follows is made up$.)$ The CFO knows the true value of the company; however, all that outsiders know is that there is a probability of $0\mathrm{.}27$ that its true value is $$1$b$.$ and a probability of $0\mathrm{.}73$ that its true value is $$5$b$.$ Rocket Lab is developing the Neutron rocket, a large$-$scale reusable launch system, which will be able to deploy a $13,000$kg payload into low Earth orbit, or a $1,500$kg payload into an orbital trajectory to Mars or Venus.$$ However, it will need an additional investment of $$1\mathrm{.}2$b$.$ which it is planning to raise through an equity issue.$$ It can only make the investment through an equity issue and if it does make the investment, it will be able to obtain the NPV of the new project, which is $$0\mathrm{.}05$b$.$ Answer the following questions: a$.$ Will the managers of Rocket Lab issue equity to raise the funds for the new investment if they know that the true value of the firm is $$1$b$.$ b$.$ Will the managers of Rocket Lab issue equity to raise the funds for the new investment if they know that the true value of the firm is $$5$b$.?$ c$.$ If the managers announce that they are planning to issue new equity worth $$1\mathrm{.}2$b what will happen to the stock price upon this announcement $($but before the actual equity issuance$)?$