MM Theory: A debt-free firm produces a constant (assumed to go on indefinitely) EBIT of $800,000, each year with the cost of capital of 10%. The value of this firm is If the firm decides to borrow $ 2 million on a ten-year loan from the bank at 5% interest rate, the value of the firm will become : Corporate tax rate is 28%. A. B. $8,000,000 ; $8,216,207.6 $8,000,000 ; $9,230,000.8 $5,760,000 ; $5,976,207.6 $5,760,000 ; $6,298,104.4 C. D. E. None of the above