An unlevered firm is worth 10,000.  It’s tax rate is 25%.  T…

An unlevered firm is worth 10,000.  It’s tax rate is 25%.  The required return of the firm’s no debt equity is 10%.  The firm issues 800 of debt to pay a dividend to existing shareholders.  The interest rate on the debt is 5%, the dollar amount of debt is fixed in perpetuity and all interest expense can be used to reduce taxable income.  After the debt is issued and the dividend is paid, what is the value of the levered firm (VL = Debt + Equity).