Referring to table below, calculate the market value of firm L (without a corporate income tax) if the equity amount in its capital structure decreases to $5,000 and the debt amount increases to $7,500. At this capital structure, the cost of equity is 20 percent. Round your answer to the nearest dollar.

Firm UFirm LNet operating income (EBIT)$1,750 $1,750

Less:Interest payments to debt holders, - -450

Income available to stockholders (dividends), D$1,750 $1,300

Total income available to security holders, I + D$1,750 $1,750

Required rate of return on debt, kd-10%Market value of debt, B = - -$4,500

Required rate of return on equity,ke14% 16.25%

Market value of equity, E = D/ke$12,500 $8,000

Market value of firm, E + B$12,500 $12,500

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