Next​ year, there are two possible values for its​ assets, each equally​ likely: $1 190 and $970. Its debt will be due w

[answerhappygod]

Next​ year, there are two possible values for
its​ assets, each equally​ likely:
$1 190
and
$970.
Its debt will be due with
4.9%
interest. Because all of the cash flows from the assets must go
to either the debt or the​ equity, if you hold a portfolio of
the debt and equity in the same proportions as the​ firm's
capital​ structure, your portfolio should earn exactly the
expected return on the​ firm's assets. Show that a portfolio
invested
39%
in the​ firm's debt and
61%
in its equity will have the same expected return as the assets
of the firm. That​ is, show that the​ firm's pre-tax WACC
is the same as the expected return on its assets.
For a portfolio of
39%
debt and
61%
​equity, the expected return on the debt will be