The market value of the assets of a corporation is currently $290.0millionbut the owners wish to onlyuse as collaterala value that will result in an interest rate of about 10%. The firm has on issue a debt outstanding that has a par value of $35.0million and a due date of exactly five years. No intermediate interest payments are required. The risk-free (continuous) rate is3.25% and the standard deviation of returns of the firm's assets is 60%.

What is thevalue of theassetsrequired by the debt holdersto permit a fair interest rate ofapproximately10%(youranswer shouldensure that the fair interest rate isin the range of>9%and<11%)?