Assume that MMs theory holds with taxes. There is no growth, and the $40 of debt is expected to be permanent. Assume a 40% corporate tax rate. a. How much of the firms value is accounted for by the debt-generated tax shield? b. How much better off will UFs a shareholder be if the firm borrows $20 more and uses it to repurchase stock?" Answer: Step 1: Tax rate - Tc = a. Permanent Debt - D = b. Additional Debt - D = Step 2: a. Tax shield formula = b. Tax shield formula = Benefit to Shareholders =