Hanover Tech Is Currently an All Equity Firm That Has

Hanover Tech is currently an all equity firm that has 320,000 shares of stock outstanding with a market price of $19 a share. The current cost of equity is 15.4 percent and the tax rate is 36 percent. The firm is considering adding $1.2 million of debt with a coupon rate of 8 percent to its capital structure. The debt will be sold at par value. What is the levered value of the equity?

A) $5.209 million
B) $5.312 million
C) $5.436 million
D) $6.512 million
E) $6.708 million