Write down the equity payoff table and draw the payoff diagram if the firm has the following capital structure:

1,000 senior bonds with promised payoffs for a total of $100 million, convertible into 50 million new equity shares 500 junior bonds with promised payoffs for a total of $50 million, convertible (at the bondholder’s discretion) into 15 million new shares 100 million equity shares for the rest of the firm It is easiest to work with aggregate figures, that is, consider the firmvalue in increments of $50 million. (Hint: At what equity value and at what firm value [the two are not the same] would the senior convert?)