KD Industries has 30 million shares outstanding with a market price of $20 per share and no debt. KD has had consistently stable earnings, and pays a 35% tax rate. Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares. After the recapitalization, the total value of KD as a levered firm is closest to: A. $470 million B. $730 million C. $670 million D. $530 million

KD Industries has 30 million shares outstanding with a market price of $20 per share and no debt. KD has had consistently stable earnings, and pays a 35% tax rate. Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares. After the recapitalization, the total value of KD as a levered firm is closest to: A. $470 million B. $730 million C. $670 million D. $530 million