A consultant has collected the following information regarding Middle Road Publishing:

Total assets	$3,000 million	Tax rate	40%
Operating income (EBIT)	$850 million	Debt ratio	0%
Interest expense	$0 million	WACC	10%
Net income	$510 million	M/B ratio	1.00
Share price	$32.00	EPS = DPS	$3.20

The company has no growth opportunities (g = 0), so the company pays out all of its earnings as dividends (EPS = DPS). The consultant believes that if the company moves to a capital structure financed with 20 percent debt and 80 percent equity (based on market values) that the cost of equity will increase to 11 percent and that the pre-tax cost of debt will be 10 percent. If the company makes this change, what would be the total market value of the firm? (The answers are in millions.)

Select one:

a. $5,100

b. $4,600

c. $4,000

d. $3,200

e. $3,800