BBB is an unlevered firm with a cost of capital of 17%. The company is considering adding debt to its capital structure to reduce equity. Specifically, the company is evaluating the consequences of adding $5 million in perpetual debt at a pre-tax cost of 6.5%. The firm expects to generate EBIT of $8 million every year into perpetuity. Assume interest expense is tax deductible. The firm pays a tax rate of 21%. Ignore financial distress costs.

Based on MM Prop I, how much additional firm value can be created if BBB takes on the debt?