Here are book and market value balance sheets of the United Frypan Company (UF): Book Value Balance Sheet Net working capital $110 $130 Long-term assets 170 150 $280 $280 Debt Equity Market Value Balance Sheet Net working capital $110 $130 Long-term assets 230 210 $340 $340 Debt Equity Assume that MM's theory holds with taxes. There is no growth, and the $130 of debt is expected to be permanent. Assume a 40% corporate tax rate. a. How much of the firm's value is accounted for by the debt-generated tax shield? PV tax shield $ 52 b. How much better off will UF's shareholders be if the firm borrows $110 more and uses it to repurchase stock? Increase in equity value $