"MSGF Inc. is financed with 50% debt and 50% equity and has a current market value of $4,000. The value of the firm would be $3,400, if it were all equity financed. The corporate tax rate is 40%. The borrowing rate is 8%. What is the decrease in firm value due to expected bankruptcy costs? "

A) 1600

B) 300

C) 3500

D) 200

E) 800