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An unlevered firm currently has a value of $2650,000. the firm has a tax rate of 40%. the firm wish to replace $1,380,000 of its

An unlevered firm currently has a value of $2650,000. the firm has a tax rate of 40%. the firm wish to replace $1,380,000 of its equity with $1380,000 of permanent debt. By increasing its leverage, the PV of the expected costs of financial distress would rise from $0 to $825,000. what is the value of levered firm if it goes ahead with this plan?

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