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If managed effectively, Rearden Metal will have assets with a market value of $197 million, $307 million, or $391 million next year, with each outcome

image text in transcribed If managed effectively, Rearden Metal will have assets with a market value of \$197 million, \$307 million, or \$391 million next year, with each outcome being equally likely. Managers, however, may decide to engage in wasteful empire building, which will reduce Rearden's market value by $20 million in all cases. Managers may also increase the risk of the firm, changing the probability of each outcome to 50%,5%, and 45% respectively. Suppose that the managers at Rearden Metal will increase risk to maximize the expected payoff to equity holders. If Rearden has $230 million in debt due in one year, then the expected value of Rearden's assets is closest to (\$ million) (2 decimal places)

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