Montana Hills Co. is considering moving from its all-equity capital structure to one with some leverage. This restructuring would involve issuing $12,000 in debt and using all the proceeds to repurchase equity. The debt would have an 8% interest rate. The tax rate is 34% and interest is tax deductible. The firm has expected EBIT of $8,100 per year and an unlevered cost of equity of 11%. What would be the value of the firm after the restructuring? Except for taxes, assume that markets are perfect (no bankruptcy, etc.).

$48,600

$50,000

$52,680

$56,667

$60,600