Brad's robotics incorporated will earn $60 in one year if it does well. the debtholders are promised payments of $40 in one year if the firm does well. if the firm does poorly, expected earnings in one year will be $10 and the repayment will be $5 because of the dead weight cost of bankruptcy. the probability of the firm performing poorly or well is 40%. if bondholders are fully aware of these costs what will they pay for the debt?

pay for the debt = $17.76

Explanation:

given data

earn = $60

debt holders payments = $40

earnings = $10

repayment = $5

probability = 40%

to find out

what will they pay for the debt

solution

we consider here interest rate on the bonds = 7%

so we now get here pay for the debt that is express as

pay for the debt = ( debt holders payments × probability + earn × repayment ) ÷ ( 1 + interest rate )    ..........................1

put here value we get

pay for the debt =

pay for the debt = $17.76

answer; (d) i believe that the correct answer is ; /// a new invention lowers the cost of production;

88 this time can i be brainliest

ty sm

: )