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24. Here are book and market value balance sheets of the United Frypan Company (U F): Book Values $ Lon -term assets 160 140 E
24. Here are book and market value balance sheets of the United Frypan Company (U F): Book Values $ Lon -term assets 160 140 E uit Market Values $ Lon -term assets 220 200 E Ul Assume that MM's theory holds with taxes. There are no costs of financial distress, no growth, and the 120 of debt is expected to be permanent. Assume a 30% corporate tax rate but no personal taxes. a. How much of the finn's value is accounted for by the debt-generated tax shield? (Do not round intermediate calculations. Express your answer in whole dollars, no "$", no decimal places.) b. How much better off will UF's shareholders be if the firm borrows $100 more and uses the funds to repurchase stock? (Do not round intermediate calculations. Express your answer in whole dollars, no "S", no decimal places.)
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