If a firm permanently borrows $60 million at an interest rate of 8 percent, what is the present value of the interest tax shield? (Assume that the marginal corporate tax rate is 21 percent.) $8.00 million $4.80 million $12.60 million $22.86 million Bombay Company's book and market value balance sheets are as follows: (NWC = net working capital; LTA = long term assets; D=debt;E= equity; V= firm value): According to MM's Proposition I corrected for taxes, what will be the change in company value if Bombay issues $200 of equity and uses it to make a permanent reduction in the company's debt? Assume a 21 percent marginal corporate tax rate. +$140 +$70 $0 $42