Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 60 percent…

Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 60 percent and the probability of a recession is 40 percent. It is projected that the company will generate a total cash flow of $200 million in a boom year and $91 million in a recession. The company’s required debt payment at the end of the year is $125 million. The market value of the company’s outstanding debt is $98 million. The company pays no taxes.
a.What payoff do bondholders expect to receive in the event of a recession? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  Payoff in $  is ? 
b.What is the promised return on the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  Promised return %  is ? 
c.What is the expected return on the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  Expected return  %  is?
 
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