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Please answer using EXCEL ONLY!!! Other answers will not be accepted. I will upvote a correct answer 9. Here are book and market value balance
Please answer using EXCEL ONLY!!! Other answers will not be accepted. I will upvote a correct answer
9. Here are book and market value balance sheets of the SamPam Company (SP): Book Value Balance Sheet Net working capital $ 90 $ 110 Debt Long-term assets 150 130 Equity $ 240 $ 240 Net working capital Long-term assets Market Value Balance Sheet $ 90 S 210 $ 300 S 110 190 Debt Equity 300 Assume that MM's theory holds with taxes. There is no growth, and the $110 of debt is expected to be permanent. Assume a 40% 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 SP's shareholders be if the firm borrows $90 more and uses it to repurchase stock
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