Baskerville Buttons is an all-equity, zero-growth firm with an EBIT of $500,000 and a cost of capital of 10%. Baskerville's management team has decided to recapitalize the firm by issuing $1,000,000 in debt at a cost of 8% and using the proceeds to repurchase shares. Under the Modigliani and Miller model with no taxes, the value of the firm after the recapitalization will be:

a) $5,000,000 b) $3,571,429 c) $4,166,667 d) $6,250,000