The General Construction Company (GCC) is expecting next year a cash flow from assets of €50 million that is expected to grow forever at 3 percent. Its cost of capital is 11 percent. The firm is exposed to the following three risks:

• There is a 10 percent chance that its cost of capital increases to 11.5 percent

• There is a 60 percent chance that its growth rate drops to 1 percent

• There is a 40 percent chance that its cash flow declines to €45 million

a. What is the market value at risk of each one of the events listed above?

b. Indicate if they are high, moderate, or low risk.