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Starpak Industries owns assets that will have an 80% probability of having a market value of $53 million in one year. There is a 20%

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Starpak Industries owns assets that will have an 80% probability of having a market value of $53 million in one year. There is a 20% chance that the assets will be worth only $23 million. The current risk-free rate is 11%, and Starpak's assets have a cost of capital of 22%. a. If Starpak is unlevered, what is the current market value of its equity? b. Suppose instead that Starpak has debt with a face value of $22 million due in one year. According to MM, what is the value of Starpak's equily in this case? c. What is the expected return of Starpak's equity without leverage? What is the expected return of Starpak's equity with leverage? d. What is the lowest possible realized return of Starpak's equity with and without leverage? a. Current market value of the unlevered equily is s million. (Round to three decimal places.)

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