Pineda Gallery is currently an all-equity firm with earnings before interest and taxes of $338,000 and a cost of equity of 14.2 percent. Assume the tax rate is 22 percent. The firm is considering adding $400,000 of debt with a coupon rate of 7 percent to its capital structure. The debt will be sold at par value. What is the levered value of the equity?

$1,987,408

$1,544,620

$2,038,519

$986,420

$1,944,620