Gladstone Corporation is about to launch a new product. Depending on the success of the new product, Gladstone may have one of four values next year: $150, $135, $95, and $80. These outcomes are all equally likely, and this risk is diversifiable. Suppose the risk-free interest rate is 5% and that, in the event of default, 25% of the value of Gladstones assets will be lost to bankruptcy costs. (Ignore all other market imperfections, such as taxes.)

Suppose Gladstone has zero-coupon debt with a $52 face value due next year. What is the initial value of Gladstones debt?