Cede & Co. can borrow at 10.50 percent. Cede currently has no debt, and the cost of equity is 17.00 percent. The current value of the firm is $658,000. The corporate tax rate is 38 percent.

Required:

What will the value be if Cede borrows $221,000 and uses the proceeds to repurchase shares?

	$879,000
	$795,020
	$471,040
	$387,060
	$741,980