4. (10 points) The following are book and market balance sheets for the Xutech company: BOOK (Millions of Dollars) Net Working Capital 40 Debt 70 Long-Term Assets 120 Equity 90 160 160 MARKET (Millions of Dollars) Net Working Capital 40 Debt Long-Term Assets 160 Equity 130 200 200 Assume perfect capital markets with both corporate and personal taxes. The firm is not expected to grow and the $70 mil of debt is expected to be permanent. The corporate tax rate is 34%, the bondholder tax rate is 28%, and the equity holder tax rate is 20%. Answer the following questions. (1) How much of the levered firm's value is attributable to the tax shield on debt? (3 points) (2) Suppose the firm borrows an additional $20 million of debt and plans to use the borrowed money to repurchase stock? What will be the market value of equity after the additional borrowing, but before the repurchase is executed? What will be the market value of equity after the additional borrowing and repurchase? (3 points) (3) Suppose that before the transaction described in part (2) the firm had 15,000,000 shares outstanding. If the firm uses the $20 million debt issue proceeds to repurchase shares at a price of $8 per share, what is the price per share after the transaction? (4 points)