Solution for a,b,c,d (all apart of one question)

Consider a firm whose only asset is a plot of vacant land, and whose only liability is debt of $15 million due in one year. If lett vacant, the land will be worth $10.3 million in one year. Alternatively, the firm can develop the land at an up-front cost of $20.2 million The developed the land will be worth $35.2 million in one year. Suppose the risk-free interest rate is 10.1% assume all cash flows are risk-free, and there are no taxes a. If the fimm chooses not to develop the land, what is the value of the firm's equity today? What is the value of the debt today? b. What is the NPV of developing the land? .. Suppose the simraises 5202 Cilion from the equity holders to develop the land. If the fiem develops the land, what is the value of the firm's equity today? What the value of the firm's debt today? d. Given your answer to part (e), would equity holders be willing to provide the $20.2 million needed to develop the land? a. If the firm chooses not to develop the land, what is the value of the firm's equity today? What is the value of the debt today? If the firm chooses not to develop the land, the value of the equity is million (Round to two decimal places)