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Suppose you borrow S[12000)]M when financing a gym that has a cost $250,000M. You expect to generate a cash flow of S[5000]M at the end

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Suppose you borrow S[12000)]M when financing a gym that has a cost $250,000M. You expect to generate a cash flow of S[5000]M at the end of the year if demand is weak, $[45000*]M if demand is as expected and S[720000)]M if demand is strong. The current risk-free interest rate is 6% (risk of debt) and there's a 10% risk premium for the risk of the assets. (HINT: If you need it, to compute the WACC of the firm, add the risk free plus the risk premium) a. What should the value of the equity be? b. What is the expected return of equity? c. What would be the return of equity if the demand is strong? d. What would be the return of equity if the demand is weak

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