Ret 6 Here are book and market value balance sheets of the United Frypan Company (UF); Book Value Balance Sheet Net working capital $170 $190 Debt Long-term assets 230 210 Equity $400 $400 5 points Market Value Balance Sheet Net working capital $170 $199 Debt Long-term assets 290 270 Equity $460 $460 Assume that MM's theory holds with taxes. There is no growth, and the $190 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? Answer is complete but not entirely correct. PV tax shield 8