Tar HeelHealthcarehas no debt financing and has a firm value of $20 million. It has a corporate tax

rate of 34 percent. The firm's investors are estimated to have marginal tax rates of 31 percent on

interest income and 28 percent on stock income. The firm is planning to change its capital structure

by issuing $10 million in debt and repurchasing $10 million of common stock.

According to the MM view with corporate taxes, what is the value of the leveraged firm?[a]