Derrin Hafford, CEO of Hafford Corp, projects that the company's EBIT will remain at a consistent level of $74,000 perpetually. Derrin expects that if the company were to borrow money now, the rate would be 7 percent. Hafford currently has no debt, and its cost of equity is 12 percent. If the tax rate is 35 percent, what is the value of the firm? What will the value be if the company borrows $125,000 and uses the proceeds to repurchase shares?