Suppose that Pfizer moves to a 40 percent book leverage ratio ((long-term debt + other long-term liabilities)/total assets) by issuing debt and using the proceeds to repurchase shares. Consider only corporate taxes and assume that debt will be held constant to perpetuity. Reconstruct its book and market balance sheets to reflect the new capital structure. How much additional value is added if the assumptions in the table are correct?

Net Working Capital Long-term assets Total assets Book Values $10,752 $8,144 Long-term debt 21,460 Other long-term liabilities 86,900 68,048 Equity 97,652 97,652 Total value Market Values $10,752 $8,144 Long-term debt 2,850 21,460 Other long-term liabilities 283,373 267,371 Equity 296,975 296,975 Total value Net Working Capital PV interest tax shield Long-term assets Total assets Net Working Capital Long-term assets Total assets Book Values $10,752 $8,144 Long-term debt 21,460 Other long-term liabilities 86,900 68,048 Equity 97,652 97,652 Total value Market Values $10,752 $8,144 Long-term debt 2,850 21,460 Other long-term liabilities 283,373 267,371 Equity 296,975 296,975 Total value Net Working Capital PV interest tax shield Long-term assets Total assets