Sport L&K Company produces annual cash flows of $478 dollars and is expected to exist forever. The company is currently financed with 66 percent equity. Your analysis tells you that the appropriate discount rates are 11.19 percent for the cash flows, and 6.47 percent for the debt. You currently own 5 percent of the shares.

If Sport L&K wishes to change its capital structure from 66 percent to 56 percent equity and use the debt proceeds to pay a special dividend to shareholders, how much debt should the company issue?

Assume that all conditions identified by the M&M Proposition 1 apply.

Round the answer to two decimals. Please enter the answer in thousands.

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