If managed effectively, Rearden Metal will have assets with a market value of $200 million, $300 million, or $400 million next year, with each outcome being equally likely. Managers, however, may decide to engage in wasteful empire building, which will reduce Rearden's market value by $20 million in all cases. Managers may also increase the risk of the firm, changing the probability of each outcome to 50%, 5%, and 45% respectively.Suppose that the managers at Rearden Metal will engage in empire building unless that behavior increases the likelihood of bankruptcy. If Rearden has $190 million in debt due in one year, then the expected value of Rearden's assets is closest to:

Select one:

A.

$300 million.

B.

$295 million.

C.

$280 million.

D.

$265 million.