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Kline Construction is an all-equity firm that has projected perpetual EBIT of $368,000. The current cost of equity is 13.5 percent and the tax rate
Kline Construction is an all-equity firm that has projected perpetual EBIT of $368,000. The current cost of equity is 13.5 percent and the tax rate is 22 percent. The company is in the process of issuing $984,000 worth of perpetual bonds with an annual coupon rate of 5.7 percent at par. What is the value of the levered firm?
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