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Trio Corp. will exist for one year. Its terminal cash flows next year will be $400,000 with probability 0.3, $700,000 with probability 0.4, or $1,000,000

Trio Corp. will exist for one year. Its terminal cash flows next year will be $400,000 with probability 0.3, $700,000 with probability 0.4, or $1,000,000 with probability 0.3. All investors are risk-neutral and require return of 10%. Ignore taxes. What is the value of the firm if it has debt obligations of $500,000 next year and the bankruptcy costs are $50,000?

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