You are the CFO of a publicly$-$listed gaming company. As such, you have access to information that the public does not. Your company has no debt and therefore faces no risk of default. Your main concern is that if share price falls below $$30$ USD per share that your stock options will be worthless.

The company announced a new game that would produce perpetual revenues of either $$100$M per year if or $$160$M per year. The public believes that the probability of high revenues is $60$ percent. The perpetual operating costs will be $$20$M per year and grow by $3$ percent per year. The project has an upfront cost of $$150$M$.$ Assume that the discount rate for all cash flows in $12$ percent. There are no other lines of business and the company has $25$M shares outstanding.

Based on the following information above:

$1.$ What is the share price of the firm?

a$)$ $$30\mathrm{.}44$

b$)$ $$28\mathrm{.}44$

c$)$ $$26\mathrm{.}44$

$2.$ Suppose that you know that the true probability of high revenues is $50$ percent. What would be the share price if this information were revealed to the public?

a$)$ $$30\mathrm{.}44$

b$)$ $$28\mathrm{.}44$

c$)$ $$26\mathrm{.}44$

Please read the questions CAREFULLY and answer BOTH questions CORRECTLY. Any wrong answers will be DOWNVOTED. Thank you!