6 Market Value Balance Sheet Net working capital $170 $190 Debt Long-term assets 299 270 Equity $460 1460 nts eBook Assume that MM's theory holds with taxes. There is no growth, and the $190 of debt is expected to be permanent. Assume a 40% corporate tax rate. Print eferences a. How much of the firm's value in dollar terms is accounted for by the debt-generated tax shield? PV tax shield 176 b. How much better off will UF's shareholders be if the firm borrows $170 more and uses it to repurchase stock? Increase in equity value