Windy ASA is a green energy company that operates wind farms. The firm has assets worth 5 000 m NOKs and equity worth 1 000 m NOKs. The interest rate that applies to Windy is 5%. a. Calculate Windys debt-to-equity ratio. Is it high, low or pretty much normal? b. Windy wants to build a new wind farm and needs 500 m NOKs now. Windy plans to finance the new farm by issuing a 15-year zero-coupon corporate bond. (i) Does a bond with a principal payment F = 1 000 m NOKs cover Windys cost if Windy successfully sells the bond at a price equal to its value? (ii) How would Windys leverage change if it successfully sold the bond? (iii) Should we expect that a higher or lower interest rate than 5% applies to Windy after it successfully sells the bond? c. Suppose that, instead of issuing a bond, Windy wants to issue stocks to cover the 500 m NOKs cost of the new wind farm: issue 10 million stocks at a price 50 NOKs each. You expect each stock of Windy to pay out a dividend of 2 NOK per stock from next year onwards until forever (the relevant interest rate is 5%). Would you buy some of Windys newly issued stocks? Why (not)? d. The new wind farm was financed somehow and built. The farm is expected to generate a gross return of 540 m NOK with 40% chance, 500 m NOK with 40% chance, and of 450 m NOK with 20% chance in present value terms. What is the expected gross return of the farm? What is the expected ROI of the farm?