Will galatasaray hire ronaldo

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Question - Fenerbahce Soccer Club has $15 million debt outstanding due next year and currently has $8 million cash. Fenerbahce has no other assets. Assume that Fenerbahce can hire a superstar soccer player Ronaldo for $8 million. Ronaldo can generate revenues of $20 million w/ probability 10% or  revenues of $2 million w/ 90% probability next year. Do Fenerbahce shareholders hire Ronaldo? Do debtholders of Fenerbahce prefer hiring Ronaldo? Galatasaray Soccer Club has no debt and has $10 million. Will Galatasaray hire Ronaldo? (Assume that discount rate is zero). Please show your work.

Reference no: EM133143410

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