Assume that MM's theory holds except for taxes. There is no growth, and the $75 of debt is expected to be permanent. Assume a 21% corporate tax rate.

a.How much of the firm's market value is accounted for by the debt-generated tax shield?(Enter your answer in million rounded to 2 decimal places.)

b.What is United Frypan's after-tax WACC ifr_Debt= 6.4% andr_Equity= 16.6%?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c.Now suppose that Congress passes a law that eliminates the deductibility of interest for tax purposes after a grace period of 5 years. What will be the new value of the firm, other things equal? Assume a borrowing rate of 6.4%.(Do not round intermediate calculations. Enter your answer in million rounded to 2 decimal places.)

Check my work Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions): Book-Value Balance Sheet Net working capital $ 48 Debt Long-term assets 66 Equity $ 138 Market-Value Balance Sheet Net working capital $ 48 Debt Long-term assets 165 Equity $ 295 $ 75 25 s; 168 s; 75 139 $ 265 Assume that MM's theory holds except for taxes. There is no growth, and the $75 of debt is expected to be permanent. Assume a 21% corporate tax rate. a. How much of the firm's market value is accounted for by the debt-generated tax shield? (Enter your answer in million rounded to 2 decimal places.) b. What is United Frypan's after-tax WACC if rDebt = 6.4% and rEquity = 16.6%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. Now suppose that Congress passes a law that eliminates the deductibility of interest for tax purposes after a grace period of 5 years. What will be the new value ofthe firm, other things equal? Assume a borrowing rate of 6.4%. (Do not round intermediate calculations. Enter your answer in million rounded to 2 decimal places.) PV tax shield million b. WACC % c. New value of the rm million