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Monsters incorporated (Mi) is ready to launch a new product. Depending upon the success of thia peoduct, Mi will have a value of ether 5100

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Monsters incorporated (Mi) is ready to launch a new product. Depending upon the success of thia peoduct, Mi will have a value of ether 5100 maiion, $150 militon, or 319t milion, with each outoume rete, which is currensy 5%. Assume that the capital markets are perfect. Assume that in the event of default, 20 ke of the value of Mrs assets will be lost in barikuptey costs and suppose that Mi has zero-coupon dobt with a 5125 malton tace vale due nent year. The inlial value of Mre dobt is closest to: A $110 milion. B. 5111 milion. C. 5105 milion. b. 5125 mation

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