Q. 9

Ryder Systems is currently an all equity firm that has 510,000 shares of stock outstanding with a market price of $53.60 a share. The current cost of equity is 10.5 percent and the tax rate is 25 percent. The firm is considering adding $4.50million of debt with a coupon rate of 6 percent to its capital structure. The debt will be sold at par value. What is the levered value of the equity? $24,186,000 $24,111,000 $24,036,000 $23,961,000 $23,886,000