Question: please help Consider a firm whose only asset is a plot of vacant land, and whose only liability is debt of $15.2 million due in

please help

Consider a firm whose only asset is a plot of vacant land, and whose only liability is debt of $15.2 million due in one year if left vacant, the land will be worth $9.9 million in one year. Alternatively, the firm can develop the land at an up-front cost of $20.1 milion The developed the land will be worth $35.9 million in one your Suppose the risk-free interest rate is 10.1% assume al cash flows are risk-free, and there are no taxes. a. If the firm chooses not to develop the land what is the value of the firm's equity today? What is the value of the debt today? b. What is the NPV of developing the land? c. Suppose the firm raises $20.1 maion from the equity holders to develop the tand. If the firm develops the land, what is the value of the firm's equity today? What is the value of the firm's debt today? d. Given your answer to part (e), would equity holders be willing to ceovide the $20.1 milion needed to develop the land? a. If the firm chooses not to develop the land, what is the value of the firm's equity today? What is the value of the debt today? y the fien chooses not to develop the land the value of the equity is $2 million (Round to two decimal places) at the fom chooses not to develop the land, the value of the dobe is $. million (Round to two decimal places.) b. What is the NPV of developing the land? The NPV of developing the land is $ million (Round to two decimal places) Next Consider a firm whose only asset is a plot of vacant land, and whose only liability is debt of $15.2 million due in one year. If left vacant, the land will be worth $9.9 a c. Suppose the firm raises 520.1 milion from the equity holders to develop the land, If the firm develops the land, what is the value of the firm's equity today? What is the value of the firm's debt today? If the firm raises $20.1 million from the equity holders to develop the land, the value of equity is $ million (Round to two decimal places.) If the firm raises $20.1 million from the equity holders to develop the land, the value of debt is $ million (Round to two decimal places.) d. Given your answer to part (c)would equity holders be willing to provide the $20.1 milion needed to develop the land? (Select the best choice below) O A No Equity holders will not be willing to accopt tho doal because for them it is a negative-NPV investment OB. No Equity holders will not be willing to accept the deal because for thom it is a positive-NPV investment OC. Yes. Equity holders will be willing to accept the deal because for thom it is a positive-NPV investment OD. Yos. Equity holders will be willing to accept the deal because for them it is a negative-NPV investment

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