What is the levered value of the equity

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Reference no: EM131087790

Alexandria's Dance Studio is currently an all-equity firm with earnings before interest and taxes of $338,000 and a cost of equity of 14.2 percent. The tax rate is 34 percent. Alexandria is considering adding $400,000 of debt with a coupon rate of 7 percent to her capital structure. The debt will be sold at par value. What is the levered value of the equity?

Reference no: EM131087790

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