Question: Simca, Inc. has debt with both a face and a market value of $28,000. This debt has a coupon rate of 7% and pays interest

Simca, Inc. has debt with both a face and a market value of $28,000. This debt has a coupon rate of 7% and pays interest annually. The expected earnings before interest and taxes is $12,500, the tax rate is 21%, and the unlevered cost of capital is 10%. What is the value of the levered firm?

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