Markman Incorporated (MI) is ready to launch a new product. Depending upon the success of this product, MI will have a value of either $65 million, $130 million, or $200 million, with each outcome being equally likely. The cash flows are unrelated to the state of the economy fie. risk from the project is diversifiable) so that the project has a beta of 0 and a cost of capital equal to the risk-free rate, which is currently 5%. Assume that in the event of default, 20% of the value of MI's assets will be lost in bankruptcy costs and suppose that MI has zero-coupon debt with a $130 million face value due next year. Assume that the capital markets are perfect except for financial distress costs. Also, assume bankruptcy costs are NOT incurred if the debt's claims are exactly equal to the value of the firm. What is the initial value of MI's debt?