Leakey Valves Inc

Leakey Valves Inc.is all equity financed and generates perpetual annual EBIT of $600.Assume that the EBIT,and all other cash flows,occur at year end and that we are currently at the beginning of a year.Assume that Leakey Valves has a 100% payout rate,1,000 shares outstanding,and that shareholders require a return of 6%.Assume that the tax rate is 0%.
Leakey Valves is considering an open market stock repurchase.It plans to buy 20% of its outstanding shares at the price of $10.00 per share.The repurchased shares will be cancelled.It will finance the repurchase by issuing perpetual bonds with a coupon rate (and yield) of 4%.Assume that the tax rate is 0%.
If Leakey Valves goes ahead with the repurchase,then what is the value of the company after the repurchase is complete?

A) $8,000
B) $10,000
C) $12,000
D) $15,000
E) $9,000