Going to your school has total additional and opportunity costs of

$30,000 this year and up front. With 90% probability, you are likely to graduate fromyour school. If you do not graduate, you have lost the entire sum. Graduating from the school will increase your 40-year lifetime annual salary by roughly $5,000 per year, but more so when the stock market rate of return is high than when it is low. For argument’s sake, assume that your extra-income beta is 1.5. Assume the risk-free rate is 3%, and the equity premium is 5%.What is the value of your education?