Kurz Co is an all equity firm with 20 million shares outstanding and has a stock price of $8 per share. Although investors currently expect Kurz to remain an all equity firm, Kurz plans to announce that it will borrow 50 million and use the funds to repurchases shares. Kurz will pay interest only and never plans to increase or decrease the debt amount. Kurz pays a 40% tax rate.
What is Kurz’s total firm value after the shares are repurchased?