Farmington Company can borrow at $7\mathrm{.}3$ percent. The company currently has no debt and the cost of equity is $11\mathrm{.}7$ percent. The current value of the firm is $$685,000.$ The corporate tax rate is $23$ percent. What will the value be if the company borrows $$400,000$ and uses the proceeds to repurchase shares?

Note: Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.$Problem $13-12$ M&M and Taxes $[$LO $2]$

Farmington Company can borrow at $7\mathrm{.}3$ percent. The company currently has no debt and the cost of equity is $11\mathrm{.}7$ percent. The current

value of the firm is $$685,000.$ The corporate tax rate is $23$ percent. What will the value be if the company borrows $$400,000$ and uses

the proceeds to repurchase shares?

Note: Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.$