Lahm Co. keeps a constant debt policy. The company has an expected EBITDA that perpetually grows at a 1.90% annual rate. All the assets are fully depreciated. At the moment the debt is $18,000,000, its cost is 3.45% and it bears no systematic risk. The unlevered cash flow next year will be $3,095,450, the beta of unlevered equity is 1.12 and the market risk premium is 5.25%. If the tax rate is 35%, what is the value of the levered firm? \

ANS: $47,961,507

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