Consider a 1 period model with dates t=0 and t=1. All investors are risk-neutral and the discount rate is 0. At t=1, one of five possible states of the world realizes. All states are equally likely to occur. Asset payments in the five states are 500 (state I), 400 (state II), 300 (state III), 200 (state IV), and 100 (state V), respectively. The firm has debt outstanding with a face value of 300. In t = 0, equity holders can implement a project that pays 10 in each state (at t=1). Equity holders will choose to implement this project at a cost of

Consider a 1 period model with dates t=0 and t=1. All investors are risk-neutral and the discount rate is 0. At t=1, one of five possible states of the world realizes. All states are equally likely to occur. Asset payments in the five states are 503 (state I), 410 (state II), 300 (state III), 200 (state IV), and 100 (state V), respectively. The firm has debt outstanding with a face value of 300. In t = 0, at a cost of 7.5, equity holders can implement a project that pays 10 in each state (at t=1). If they have to finance the project with junior debt, what face value will junior debtholders request to agree to the financing? Round to 2 decimals.