wuestion 15

Kline Cohstruction is an all-equity firm that has projected perpetual EBIT of $288,000. The current cost of equity is 11.5 percent and the tax rate is 22 percent. The company is in the process of issuing $904,000 worth of perpetual bonds with an annual coupon rate of 5.7 percent at par. What is the value of the levered firm? $1,836,522 $1,953,391 $1,898,376 $2,152,271 $1,487,583