A firm is currently an all equity firm that has 510,000 shares of stock outstanding with a market price of $53.60 a shar

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answerhappygod
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A firm is currently an all equity firm that has 510,000 shares of stock outstanding with a market price of $53.60 a shar

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A firm 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 $7.10million 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 ?
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