Pennewell Publishing Inc. $($PP$)$ is a zero growth company. It currently has zero debt and its earnings before interest and taxes $($EBIT$)$ are $$80,000.$ PP$\text{'}$s current cost of equity is $10\%,$ and its tax rate is $25\%.$ The firm has $10,000$ shares of common stock outstanding selling at a price per share of $$48\mathrm{.}00.$

Refer to the data for Pennewell Publishing Inc. $($PP$).$ PP is considering changing its capital structure to one with $30\%$ debt and $70\%$ equity, based on market values. The debt would have an interest rate of $8\%.$ The new funds would be used to repurchase stock. It is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to $12\%.$ If this plan were carried out, what would be PP$\text{'}$s new value of operations?

a$.$ $$617,647$

b$.$ $$552,941$

c$.$ $$648,529$

d$.$ $$680,956$

e$.$ $$588,235$