RegionBank, a commercial real estate lender, has fallen on financial difficulty and a government takeover is a possibility. Pierre, the CEO of CashDollarCo, one of RegionBank's minor creditors, is...

RegionBank, a commercial real estate lender, has fallen on financial difficulty and a government takeover is a possibility. Pierre, the CEO of CashDollarCo, one of RegionBank's minor creditors, is working on a strategy for restructuring its portion of RegionBank's debt. Pierre presents his board with four alternatives that are detailed in the graph given here. CashDollarCo is risk-neutral in the range between -$200 Million and $400 Million.