X 4) Pluto Limited is financed with $2 billion of debt at an interest rate of 10% and $8 billion of equity. If management works as usual, Pluto would earn revenues of $10 billion and incur operating expenses of $9.5 billion, and so operating income would be $0.5 billion. If management works hard to cut costs, operating expenses would be $9.0 billion (a) Construct a game in extensive form with the following nodes. At the first node, a private-equity fund chooses between a leveraged buyout of Pluto and the status quo. At the subsequent node, management chooses between working as usual and cutting costs. (b) Suppose that the leveraged buyout recapitalizes Pluto to $8 billion of debt at an interest rate of 10% and $2 billion of equity. Calculate Pluto's profit if management: (i) works as usual, and (ii) cuts costs. (c) Explain how the leveraged buyout serves as a strategic move to cut costs