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Morning Star is currently an all equity firm that has 1,650,000 shares of stock outstanding with a market price of $47 a share. The current
Morning Star is currently an all equity firm that has 1,650,000 shares of stock outstanding with a market price of $47 a share. The current cost of equity is 9.26 percent and the tax rate is 25 percent. The firm is considering adding $4.9 million of debt with a coupon rate of 6.0 percent to its capital structure. The debt will be sold at par value. What is the levered value of the equity? $73,875,000 $76,519,000 $79,226,700 $82,311,000 $85,467,000
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