Referring to table below, calculate the market value of firm L (without a corporate income tax) if the equity amount in its capital structure decreases to $10,000 and the debt amount increases to $10,000. At this capital structure, the cost of equity is 21 percent. Round your answer to the nearest dollar.

			Firm U			Firm L
	Net operating income (EBIT)		$	3,000		$	3,000
	Less: Interest payments to debt holders, I			-			675
	Income available to stockholders (dividends), D		$	3,000		$	2,325
	Total income available to security holders, I + D		$	3,000		$	3,000
	Required rate of return on debt, kd			-			9	%
	Market value of debt, B = I/kd			-		$	7,500
	Required rate of return on equity,ke			15	%		18.6	%
	Market value of equity, E = D/ke		$	20,000		$	12,500
	Market value of firm, E + B		$	20,000		$	20,000

2.