A mature company believes that it will generate cash flows from assets of $$2,000,000$ a year,

indefinitely $($i$.$e$.,$ in perpetuity$).$ The cost of capital $($required return$)$ of the company$$s assets is

$11\%.$ The company also has debt outstanding, with a face value of $3,300,000,$ which takes the

form of a perpetuity $($i$.$e$.,$ the debt will remain outstanding forever$)$ and carries an interest rate

of $6\mathrm{.}5\%.$ The interest on the company$$s debt is tax deductible, and the company pays corporate

taxes at a rate of $20\%.$ What is the total value $($the debt plus equity value$)$ of the firm?

The correct answer is $$18,841,818.$