Suppose a linear probability model you have developed finds there are two factors influencing the past bankruptcy behavior of firms: the debt ratio and the profit margin. Based on past bankruptcy experience, the linear probability model is estimated as:

PDi = 0.21(Debt ratio) 0.16(Profit margin).

A firm you are thinking of lending to has a debt ratio of 45 percent and a profit margin of 8 percent.

Calculate the firms expected probability of default, or bankruptcy?