A financial analyst is evaluating the capital structure for Boulder, Inc. Boulder, Inc., is a US$-$based unleveraged firm with a constant $($perpetual$)$ cash flow of $$6$ million per year before taxes. The firm has a market value of $$45$ million and a corporate tax rate of $30\%.$ Boulder plans to issue $$15$ million in debt to retire an equivalent amount of equity. The debt will have a cost of $5\mathrm{.}5\%.$

The financial analyst notes that the tax shield advantage of debt is offset due to the risk of financial distress. He estimates the present value of the cost of financial distress at various debt levels as follows:

Value of Debt Present Value of Cost of Distress

$$5$ million $$0\mathrm{.}1$ million

$$10$ million $$0\mathrm{.}2$ million

$$15$ million $$0\mathrm{.}5$ million

$$20$ million $$1\mathrm{.}5$ million

$$25$ million $$6\mathrm{.}0$ million

$$30$ million $$12\mathrm{.}0$ million

Question

Q$.$ Including the present value of the cost of distress, the value of Boulder is closest to:

A$.$$$49$ million.

B$.$$$55$ million.

C$.$$$59\mathrm{.}5$ million.