Solve only (d) part

Question 4 (25 marks] Company X has zero-coupon debt outstanding with a face value of F > 0 due in exactly one year. This debt does not contain any covenants. The value of the company's assets when the debt comes due will either be 0.90, or 180 with probabilities 0.2, 0.6, and 0.2, respectively. The current market and also fair) value of the company's equity is 16. There are no taxes or direct costs of financial distress, all investors are risk neutral, and the risk-free interest rate is zero. The managers of the firm always act in the interests of existing shareholders. When answering each question, state any additional assumptions you may need to make. Show all working/calculations. (a) Determine F, the face value (.e. promised payment) of the company's debt. [3 marks) Suppose X's managers can choose to costlessly restructure the company's assets so that they will be worth 0 or 180 next year with probabilities 0.7 and 0.3, respectively. (b) Assuming the firm retains its existing assets, graph the expected payoff to X's sharehold- ers as a function of F. i.e. for all feasible face values of debt, 0