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Here are book and market value balance sheets of the United Frypan Company (UF): Book Value Balance Sheet Het working capital $210 $230 Debt Long-term

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Here are book and market value balance sheets of the United Frypan Company (UF): Book Value Balance Sheet Het working capital $210 $230 Debt Long-term assets 270 250 Equity $480 $430 Market Value Balance Sheet Net working capital $210 $230 Debt Long term assets 330 310 Equity $540 $540 Assume that MM's theory holds with taxes. There is no growth, and the $230 of debt is expected to be permanent. Assume a 40% corporate tax rate o. How much of the firm's value in dollar terms is accounted for by the debt generated tax shield? Vi hold

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