Great Lakes Shipping Is an All-Equity Firm with Anticipated Earnings

Great Lakes Shipping is an all-equity firm with anticipated earnings before interest and taxes of $439,000 annually forever.The present cost of equity is 16.4 percent.Currently,the firm has no debt but is considering borrowing $1.25 million at 8.5 percent interest.The tax rate is 36 percent.What is the value of the levered firm?

A) $2,163,171
B) $2,406,519
C) $2,588,547
D) $2,666,667
E) $2,818,181