Rose Industries has a $50 million loan due at the end of the year and its assets will have a market value of only $40 million when the loan comes due. Currently Rose has $5 million in cash. Rose is considering two possible uses for this cash. One possibility is to pay the $5 million out to shareholders in the form of a special dividend. The second possibility is to invest the $5 million into a project that pays $9 million. Assume discount rates are zero. 1)What is the payoff to equity if Rose pays a dividend? 2) What is the payoff to debt if Rose pays a dividend? 3) What is the payoff to equity if Rose invests? 4) What is the payoff to debt if Rose invests? 5)What will equity do? 6)What face value of debt makes both debtholders and shareholders better off?