line Construction is an all-equity firm that has projected perpetual earnings before interest and taxes of $628,000. The current cost of equity is 17.6 percent, and the tax rate is 25 percent. The company is in the process of issuing $4.3 million of 8.3 percent annual coupon bonds at par. What is the levered value of the firm

Equity, also known as shareholders' equity or owners' equity for privately held businesses, is the sum of money that would remain in the hands of a company's shareholders in the event that all of its assets were sold off and its liabilities were fully settled.
It is the worth of company sales less any obligations owing by the company that were not transferred with the sale in the case of an acquisition.
Additionally, a company's book value may be represented through shareholder equity.
Equity may occasionally be given in exchange for cash. Additionally, it symbolizes the proportionate ownership of a company's shares.

VU = [$628,000 x (1-.35)/.176 = $2,319,318

Levered cash flow is the amount of money left over after a company has paid its debts. Unlevered free cash flow is the amount of money available to the company prior to meeting its debt obligations.

The levered value of the firm is:

VL = $2,319,318 + (.35 x $4,300,000) = $3,824,318

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