Bellhorn Shoes' Value with No Debt Is $150 Million

Multiple Choice

Bellhorn Shoes' value with no debt is $150 million. However, the firm uses $60 million in debt financing, and its corporate tax rate is 40 percent. Bellhorn's CFO is trying to value the firm now. By how much does the firm's value change, if the CFO values Bellhorn using Modigliani and Miller's corporate taxes model instead of the no taxes model?

A) $20 million
B) $24 million
C) $36 million
D) $44 million
E) $60 million