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Your company, which works in retail, is looking into launching a new product. Based on market studies, your company estimates the probability of success to

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Your company, which works in retail, is looking into launching a new product. Based on market studies, your company estimates the probability of success to be 70%. Under perfect capital markets, your company expects the following cash flows (in millions) In real-world scenarios, your company expects the following cash flows from the project (in millions) You are given that this project's risk is diversifiable, and the risk-free rate is 4%. Calculate the impact of costs of financial distress to your company's firm value, based on real-world scenarios, assuming it relies on leverage. A. Less than 11 million B. Greater than 11 million but less than 13 million C. Greater than 13 million but less than 15 million D. Greater than 15 million but less than 17 million E. Greater than 17 million. Your company, which works in retail, is looking into launching a new product. Based on market studies, your company estimates the probability of success to be 70%. Under perfect capital markets, your company expects the following cash flows (in millions) In real-world scenarios, your company expects the following cash flows from the project (in millions) You are given that this project's risk is diversifiable, and the risk-free rate is 4%. Calculate the impact of costs of financial distress to your company's firm value, based on real-world scenarios, assuming it relies on leverage. A. Less than 11 million B. Greater than 11 million but less than 13 million C. Greater than 13 million but less than 15 million D. Greater than 15 million but less than 17 million E. Greater than 17 million

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