Bassett Fruit Farm expects its EBIT to be $341,000 a year forever. Currently, the firm has no debt. The cost of equity is 12.4 percent and the tax rate is 40 percent. The company is in the process of issuing $2.4 million worth of bonds at par that carry an annual coupon of 6 percent. What is the unlevered value of the firm?

Multiple Choice

• $2,221,667

• $1,650,000

• $1,485,000

• $2,610,000

• $1,833,333