Suppose you borrow $50000 when financing a coffee shop with a cost of $65000. You expect to generate a cash flow of $65000 at the end of the year if demand is weak, $81250 if demand is as expected and $89375 if demand is strong. Each scenario is equally likely. The Current risk free interest rate 5%( risk of debt) and there's an 9% risk premium for the risk of the assets.

1. What should the value of the equity be?
2. What is the expected return of the equity?
3. What would be the return of equity if the demand is strong?
4. What would be the return of equity if the demand is weak?
5. What would be the expected return if you borrowed $30000 instead?