Question 1 6 pts Suppose that Gale Corp has the following distribution for its before-tax earnings: Before-tax earnings probability 30 million 80% 0 million 20% Before-tax earnings are taxed at 30% when they are below $10 million and 50% when they are above $10 million. What are the after-tax earnings of Gale Corp when it chooses to not hedge its before-tax earnings? The company now decides to fully its earnings risk. Assume the insurer charges a 50% loading. How much is the insurance premium paid by Gale Corp? What are the after-tax earnings of the firm when Gale Corp hedges its earnings risk using the insurance mentioned in (2)? Upload Choose a File Question 1 6 pts Suppose that Gale Corp has the following distribution for its before-tax earnings: Before-tax earnings probability 30 million 80% 0 million 20% Before-tax earnings are taxed at 30% when they are below $10 million and 50% when they are above $10 million. What are the after-tax earnings of Gale Corp when it chooses to not hedge its before-tax earnings? The company now decides to fully its earnings risk. Assume the insurer charges a 50% loading. How much is the insurance premium paid by Gale Corp? What are the after-tax earnings of the firm when Gale Corp hedges its earnings risk using the insurance mentioned in (2)? Upload Choose a File