Here are book and market value balance sheets of the United Frypan Company (UF): Book Value Balance Sheet Net working capital Long-term assets $ 220 280 $ 240 Debt 260 Equity $ 500 $ 500 Net working capital Long-term assets Market Value Balance Sheet $ 220 340 $ 240 Debt 320 Equity $ 560 $ 560 Assume that MM's theory holds with taxes. There is no growth, and the $240 of debt is expected to be fixed and 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? b. How much better off will UF's shareholders be if the firm borrows $220 more and uses it to repurchase stock? a. PV tax shield b. Increase in equity value