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Hanover Tech is currently an all - equity firm that has 6 3 0 , 0 0 0 shares outstanding with a market price of

Hanover Tech is currently an all-equity firm that has 630,000 shares outstanding with a market price of $42 a share. The current cost of equity is 15.4 percent and the tax rate is 21 percent. The firm is considering adding $2.8 million of debt with a coupon rate of 8 percent to its capital structure. The debt will be sold at par value. What is the levered value of equity (that is, value of equity if the debt is included)?
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$25,421,000
$26,460,000
$27,640,000
$24,248,000

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