Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions):...

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Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions): Book-Value Balance Sheet Net working capital $ 50 Debt Long-term assets 50 Equity $ 70 30 $ 100 $ 100 Market-Value Balance Sheet Net working capital Long-term assets $ 50 200 $ 250 Debt Equity $ 70 180 $ 250 Assume that MM's theory holds except for taxes. There is no growth, and the $70 of debt is expected to be permanent. Assume a 21% corporate tax rate. a. How much of the firm's value is accounted for by the debt-generated tax shield? Note: Enter your answer in million rounded to 2 decimal places. b. What is United Frypan's after-tax WACC if Debt = 7.4% and rEquity = 15.6%? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. c. Now suppose that Congress passes a law that eliminates the deductibility of interest for tax purposes after a grace period of 5 years. What will be the new value of the firm, other things equal? Assume an 7.4% borrowing rate. Note: Do not round intermediate calculations. Enter your answer in million rounded to 2 decimal places. a. PV tax shield b. WACC million % c. New value of the firm million Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions): Book-Value Balance Sheet Net working capital $ 50 Debt Long-term assets 50 Equity $ 70 30 $ 100 $ 100 Market-Value Balance Sheet Net working capital Long-term assets $ 50 200 $ 250 Debt Equity $ 70 180 $ 250 Assume that MM's theory holds except for taxes. There is no growth, and the $70 of debt is expected to be permanent. Assume a 21% corporate tax rate. a. How much of the firm's value is accounted for by the debt-generated tax shield? Note: Enter your answer in million rounded to 2 decimal places. b. What is United Frypan's after-tax WACC if Debt = 7.4% and rEquity = 15.6%? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. c. Now suppose that Congress passes a law that eliminates the deductibility of interest for tax purposes after a grace period of 5 years. What will be the new value of the firm, other things equal? Assume an 7.4% borrowing rate. Note: Do not round intermediate calculations. Enter your answer in million rounded to 2 decimal places. a. PV tax shield b. WACC million % c. New value of the firm million