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Bassett Fruit Farm expects its EBIT to be $ 3 3 3 , 0 0 0 a year forever. Currently, the firm has no debt.

Bassett Fruit Farm expects its EBIT to be $333,000 a year forever. Currently, the firm has no debt. The cost of equity is 12.2 percent and the tax rate is 35 percent. The company is in the process of issuing $2.2 million worth of bonds at par that carry an annual coupon of 5.8 percent. What is the unlevered value of the firm?
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$1,774,180
$1,596,762
$1,971,311
$2,257,746
$2,544,180

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