Consider a simplefm that has the following market-value balance sheet Assets Liabilities & Equity $450 580 $1,030Debt Equity Next year, there are two possible values for its assets, each equally likely: $1.180 and $950 ts debt will be due w ith 5 % interest. Because all of the cash flows om the assets must go either to the debt or the equity if you hold a portfolio of the debt and equity n the same proportions as the firms ca ptal structure our portfo o should earn act the expected return on the rm's assets. Show ha a on 0 invested a % h firm's debt and 56% in its equity will have the same expected retum as the assets of he rm. That is show that the r s ACC s e same as the expected return on its assets. lf the assets will be worth $1 180 in one year, the expected return on assets will be %. Round to one decimal place. If the assets will be worth $950 in one year, the expected return on assets will be %. (Round to one decimal place.) The expected return on assets will be %. (Round to one decimal place.) For a portfolio of 44% debt and 56% equity, the expected return on the debt will be % Round to one decimal place. If the equity will be worth $707.05 in one year, the expected return on equity wil be 9 Round to one decimal place. If the equity will be worth $477.05 in one year, the expected return on equity will be Round to one decimal place. The expected return on equity will be % (Round to one decimal place.) The expected pre-tax return on a portfolio of 44% debt and 56% equity will be % Round to one decimal place. There may be a slight difference due to rounding Consider a simplefm that has the following market-value balance sheet Assets Liabilities & Equity $450 580 $1,030Debt Equity Next year, there are two possible values for its assets, each equally likely: $1.180 and $950 ts debt will be due w ith 5 % interest. Because all of the cash flows om the assets must go either to the debt or the equity if you hold a portfolio of the debt and equity n the same proportions as the firms ca ptal structure our portfo o should earn act the expected return on the rm's assets. Show ha a on 0 invested a % h firm's debt and 56% in its equity will have the same expected retum as the assets of he rm. That is show that the r s ACC s e same as the expected return on its assets. lf the assets will be worth $1 180 in one year, the expected return on assets will be %. Round to one decimal place. If the assets will be worth $950 in one year, the expected return on assets will be %. (Round to one decimal place.) The expected return on assets will be %. (Round to one decimal place.) For a portfolio of 44% debt and 56% equity, the expected return on the debt will be % Round to one decimal place. If the equity will be worth $707.05 in one year, the expected return on equity wil be 9 Round to one decimal place. If the equity will be worth $477.05 in one year, the expected return on equity will be Round to one decimal place. The expected return on equity will be % (Round to one decimal place.) The expected pre-tax return on a portfolio of 44% debt and 56% equity will be % Round to one decimal place. There may be a slight difference due to rounding