peabody manufacturing (PM) does not plan to grow its operations in the future. It has no debt and its EBIT is 80,000. PM's tax rate is 40% and it has a cost of equity of 10%. Peabody manufacturing currently has 10,000 common shares of stock outstanding that sell at a price of $48 per share.

PM is thinking about changing its capital structure by adding debt to create a 30% debt / 70% equity capital structure that is based on market values. The debt would have an interest rate of 8% and the new funds would be used for a stock repurchase. PM estimates that the increased risk due to adding leverage would increase the required rate of return on its equity to 12%. What would be PM's new value of operations if this plan were carried out?