Mett Co. is planning to develop a new product. A year after the launch of the product, it can generate additional cash flows for the company of either 250,000, 110,000, 90,000 or 50,000, with all four scenarios equally likely. The project requires an initial investment of 90,000. The companys beta is 0.65, its cost of capital is 6%, and the riskfree rate is 3%. Assume perfect capital markets. Suppose the initial 90,000 is raised by borrowing at the risk-free interest rate instead of issuing equity. What are the cash flows to equity and debt holders, and what is the initial value of the levered equity according to Modigliani and Millers Propositions? Is the companys cost of equity the same as before? Overall, can the company raise the same amount of capital as before? Explain your reasoning.