The Redwood Company is financed entirely with equity. The company is considering a loan of $20 million. The loan will be repaid in equal principal instalments over the next two years and has an interest rate of 8 percent. The company's tax rate is 24 percent. Assume there is no default risk. According to MM Proposition I with taxes, show how much firm value increase is attributed to the interest tax shield of the loan? Select an answer that is closest to yours.

Group of answer choices

$2.4 million

$0.576 million

$0.520 million

$1.6 million