You work for Corona-Drugs, a start-up Biotech firm that works on vaccines. The company has just received a 15-year patent on a new drug that has the potential of being used to treat the most acute COVID19 cases. The company plans to license this drug to a larger pharmaceutical company, and it has 2 offers. Amgen has offered to pay $100 million immediately and $60 million a year, each year for the next 10 years. Pfizer has offered to pay $50 million today and share 2% of projected Operating income from the company's Infectious Diseases Division, each year for the next 12 years. (The Infectious Diseases Division is expected to generate $2.5 billion in Operating Income per year for the next 15 years). You have been advised that the discount rate to evaluate offers of this nature is 10%. Which offer will create more value to Corona-Drugs shareholders? Justify your answer with numbers. (15 Points). QUESTION 4. (15 POINTS). A company has a single zero-coupon bond outstanding which matures in 10 years with a face value of $40 million. The current value of the company's assets is $32 million, and the standard deviation of the return on the firm's assets is 29% per year. The risk-free rate is 5% per year, compounded continuously. a. What is the current market value of the company's equity? (10 points). b. What is the current market value of the company's debt? (2 points) c. What is the company's effective cost of debt? (3 points)