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Note that the two projects have the same expected poyofi, but investment Hi has higher risk. The debtholders always get paid first and the stoctholders

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Note that the two projects have the same expected poyofi, but investment Hi has higher risk. The debtholders always get paid first and the stoctholders receive any money that is aviliable after the debtholders have been paid under both ceonomie condifici a. Assume that the company seleets Investment L. What's the debtholden' payoff (including principal and interest payment in dollar amount) when the economy is weak? What's the debtholders' payoff when the cconomy is strong? What's the debtholder's' expected payofir? b. Assume that the company selects lnvestment H. What's the debtholders' payofr when the economy is weak? What's the debtholders' payoff when the cconomy is strong? What's the debtholders' expected payofr? c. Would the debtholdens prefer that the company's managers select Inventment L or Investment H? Briefly explain your reason

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