I got the answer below on the question, but it doesn't seem to be correct. Please don't round intermediate solutions. Thanks

Question

3.

value: 16.66 points

Levered, Inc., and Unlevered, Inc., are identical in every way except their capital structures. Each company expects to earn $29.3 million before interest per year in perpetuity, with each company distributing all its earnings as dividends. Levereds perpetual debt has a market value of $94 million and costs 8 percent per year. Levered has 2.6 million shares outstanding, currently worth $108 per share. Unlevered has no debt and 4.8 million shares outstanding, currently worth $83 per share. Neither firm pays taxes.

What is the value of each company's equity? (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars, i.e., 1,234,567.)

	Value of equity
Unlevered	$
Levered	$

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Anonymous answered this 38 minutes later

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Value of equity = earnings / number of share outstanding

Unlevered = $29.3 million / 4.8 million

= $6.104

Levered = Earnings after interest / number of share outstanding

Earnings after tax = $29.3 million - (94 million * 8%) = $21.78 million

Value of equity = 21.78 / 2.6 million

= $ 8.38