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Company is currently an all equity firm that has 450,000 shares of stock outstanding with a market price of $53.60 a share. The current cost
Company is currently an all equity firm that has 450,000 shares of stock outstanding with a market price of $53.60 a share. The current cost of equity is 10.5 percent and the tax rate is 25 percent. The firm is considering adding $6.70 million of debt with a coupon rate of 6 percent to its capital structure. The debt will be sold at par value. What is the levered value of the equity?
$17,365,000
$17,814,000
$18,280,000
$18,864,000
$19,095,000
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