QUESTION 3 a. Discuss two direct costs of bankruptcy. (5 marks) b. Consider the returns for Firm A and the market returns under the following economic conditions: FIRMA MARKET Depression 20% 10% Recession -2% Normal 8% 3% Boom 12% 5% The value of the firm is known with P40 million debt and P60 million equity. This firm has 60 shares outstanding all held by management: 1. What is the expected return for Firm A and the market? (4 marks) ii. Calculate the covariance between the returns of Firm A and the market return. (4 marks) ili. Calculate the variance of the market's return. (4 marks) iv. What will be the estimated beta for this firm? (3 marks