Question: Answer in Excel format please, thank you! 9. Here are book and market value balance sheets of the SamPam Company (SP): Book Value Balance Sheet

Answer in Excel format please, thank you!

9. Here are book and market value balance sheets of the SamPam Company (SP): Book Value Balance Sheet $ 90 $ 110 Net working capital Long-term assets Debt Equity 150 130 $ 240 $ 240 Market Value Balance Sheet $ 90 Net working capital Long-term assets 110 190 Debt Equity 210 300 $ 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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