12. Teresa Music Studio is currently an all-equity firm, with market price per share as $42 and there are 80,000 shares outstanding. The current cost of equity is 12% and the tax rate is 34%. The company is considering adding $1 million of debt with a coupon rate of 8% to her capital structure. The debt will be sold at par value. What is the levered value of the equity? A. $2.4 million B. $2.7 million C. $3.3 million