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Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $150,000 per year....

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Finance

Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $150,000 per year. The cost of equity is 10.9 percent and the tax rate is 25 percent. The firm can borrow perpetual debt at 6 percent. Currently, the firm is considering taking on debt equal to 60 percent of its unlevered value. What is the firm's levered value?

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