La Desgmcia is currently an all equity rm that has 400,000 shares of stock out standing with a market price of $30 a share. The current cost of

La Desgracia is currently an all equity firm that has 400,000 shares of stock out- standing with a market price of $30 a share. The current cost of equity is 11.0% and the tax rate is 32%. The firm is considering adding $3.0 million of debt with a coupon rate of 8.0% to its capital structure. The debt will be sold at par value. What is the levered value of the firm’s equity?

La Desgmcia is currently an all equity firm that has 400,000 shares of stock out—standing with a market price of $30 a share. The current cost of equity is 11.0%and the tax rate is 32%. The firm is considering adding $3.0 million of debt witha coupon rate of 8.0% to its capital structure. The debt will be sold at par value.What is the levered value of the firm ’3 equity? a. $9.960 millionb. 311.040 millionc. $12960 milliond. $8.050 millione. $9.000 million

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