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Your firm has perpetual annual earnings before interest and taxes of $2,368,000 and has no debt. The firm pays a tax rate of 38% and
Your firm has perpetual annual earnings before interest and taxes of $2,368,000 and has no debt. The firm pays a tax rate of 38% and its cost of equity is 10.89%. The firm is debating the addition of $6,500,000 of debt (sold at par value) with a coupon rate of 6% to its capital structure. What would be the firm's levered equity value?
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