"Lake Corp. is currently unlevered and has a value of $500 million. The firm will issue $250 million of debt and use the proceeds to repurchase equal amount of equity. The tax rate is 40%, and, in the event of bankruptcy, the firm will incur costs. The value of the company after the repurchase program is $550? What is the reduction in firm value due to expected bankruptcy costs?"

$50 million

$100 million

$150 million

$200 million