Question 60 of 69 1:45 Points Questions 60-65 refer to the following. Barbara can seek financing by issuing either debt or equity. If Barbara devotes minimal effort to her job, she is unlikely to get a promotion and a raite, and her expected income will equal $80,000. If Barbara works hard, however, she stands a better chance of getting a promotion and a raise, and her expected income will be $100,000. Barbara's divutility off working hard is $16,000, and her cost of funds is $25,000. Assume that information is asymmetric and that everyone is risk neutral. Which of the following is the most accurate statement of the information problem faced by the savers? A. they can't observe Barbara's work effort B. they don't know if they can trust Barbara's promise that she will work hard C. they don't know how hard Barbara will work D. they don't know Barbara's disutility of hard work Reset SelectionQuestion 64 of 69 1 45 Points Questions 60-65 refer to the following. Barbara can seek financing by issuing either debt or equity. if Barbara devotes minimal effort to her job, she is unlikely to get a promotion and a raise, and her expected income will equal $80,000. If Barbara works hard, however, she stands a better chance of getting a promotion and a raise, and her expected income will be $100,000. Barbaris's disunity of working hard is $16,000, and her cost of funds is $25,000. Assume that information is asymmetric and that everyone is risk neutral How much is Barbara's expected net payoff if she sells bonds? A $55,000 B. $56,000 C. $57,000 D. $58,000 E. $59,000 Reset SelectionQuestion 65 of 69 1.45 Points Questions 60-65 refer to the following. Barbara can seek financin issuing either debt or equity. If Barbara devotes minimal effort to her job, she is unlikely to get a promotion and a raise, and her expected income will equal $80,000. If Barbara works hard, better chance of getting a promotion and a raise, and her expected income will be $100,000, Barbara's disunity of working hard is $16,000, and her cost of funds is $25,000, A metric and that everyone is risk neutral. In equilibrium, Barbara issues and A debt: works hard B. equity; works hard C. equity, shirks D. debt: shirks Reset SelectionQuestion 62 of 69 1 45 Points Questions 60-65 refer to the following. Barbara can seek suing either debt or equity. If Barbara devotes minimal effort to her job, she is unlikely to get a promotion and a raise, and ber expected income will equal $80,000. If Barbara hard, bette chance of getting a promotion and a raise, and her expected income will be $100,060. Barbara's dingtility of working hard is $16,000, and her cost of funds is $25,000. Assume that information tric and that everyone is risk neutral. If savers were to buy a 1/4 share, how much would they get paid? A. $25,000 B. SO C $30,000 D. $20,000 E. $15,000 Reset SelectionQuestion 63 of 69 1.45 Points Questions 60-65 refer to the following. Barbara can see or equity. if Barbara devotes minimal effort to her job, she is unlikely to get a promotion and a raise, and her expected income will equal $80,090. if Barbara works h of getting a promotion and a raise, and her expected income will be $106,060. Barbara's disutility of working hard is $16,000, and her cost of funds is $25,000. and that everyone is risk neutral. How much is Barbara's expected net payoff if she offers save would accept? A $45,000 B. $50,000 C $60,000 D. $55,000 Reset SelectionQuestion 61 of 69 1.45 Points Questions 60-65 refer to the following. Barbara can seek financing by issuing either debt or equity. If Barbara devotes minimal effort to her job, she is unlikely to get a promotion and a maite, and her expected income will equal $80,000. if Barbara works hard, however, she stands a better chance of getting a promotion and a raise, and her expected income will be $100,000. Barbara's disutility of working hard is $16,000, and her cost of funds is $25,000. Assume that information is asymmetr ic and that everyone is risk neutral. On average, hard work by Barbara will increase total surplus by how much? A $2,000 B. $6,000 C. $3,000 D. $4,000 OE. $5,000 Reset Selection