Problem: BJK has debt outstanding with the face value of $200 million. The value of the firm if it were entirely financed by equity would be $350 million. Number of shares outstanding is 5 million. The stock is currently selling at $32. The corporate tax rate is 20%. What is the decrease in the value of the company due to expected bankruptcy cost? Provide justifications and citations for your responses.
A.$28000000
B. $280000
C. $30000000
D. $45000000
E. $12000000