Check m Here are book and market value balance sheets of the United Frypan Company (UF): Book Value Balance Sheet Net working capital $140 $160 Debt Long-term assets 200 180 Equity $340 $340 Market Value Balance Sheet Net working capital $140 $160 Debt Long-term assets 260 240 Equity $400 $400 ces Assume that MM's theory holds with taxes. There is no growth, and the $160 of debt is expected to be permanent. Assume a 30% corporate tax rate. a. How much of the firm's value in dollar terms is accounted for by the debt-generated tax shield? PV tax shield 6 Check my work Assume that MM's theory holds with taxes. There is no growth, and the $160 of debt is expected to be permanent. Assume a 30% corporate tax rate. a. How much of the firm's value in dollar terms is accounted for by the debt-generated tax shield? its PV tax shield eBook ferences b. How much better off will UF's shareholders be if the firm borrows $140 more and uses it to repurchase stock? Increase in equity value