1. Milano Pizza Club owns a chain of three identical restaurants for their Milan style pizza. Each store has a debt-to-equity ratio of 30 percent and makes interest payments of $25,650 at the end of each year. An equivalent all-equity financed store would have a discount rate of 15 percent and the cost of debt is 9.5%. For each store, the estimated annual sales are $1,000,000, costs of goods sold are $400,000, and overhead costs are $300,000. Each of these cash flow streams is assumed to be a perpetuity. The corporate tax rate is 40 percent. Using the FTE approach, what is the value of Milanos Pizza Clubs equity?

Answer is $3,088,367.73

^Please show work how to get this^