Blaine Shoes, an unlevered firm, has a cost of capital of 15 percent and earnings before interest and taxes of $500,000. Blaine increases its leverage by taking on debt of $700,000 with a rate of 7.5 percent. The applicable tax rate is 35 percent.

What is the value of Blaine as a levered firm?

Group of answer choices

2,411,667

2,236,791.03

2,531,048.12

2,612,693.83

2,783,322.68