Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions): Book-Value Balance Sheet Net working capital $ 25 Debt $ 60 Long-term assets 75 Equity 40 $ 100 $...

Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions):

Assume that MM’s theory holds except for taxes. There is no growth, and the $60 of debt is expected to be permanent. Assume a 21% corporate tax rate.

a.
How much of the firm's market value is accounted for by the debt-generated tax shield?(Enter your answer in million rounded to 2 decimal places.)

b.
What is United Frypan’s after-tax WACC if
r
_Debt
= 6.7% and
r
_Equity
= 16.3%?
(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c.
Now suppose that Congress passes a law that eliminates the deductibility of interest for tax purposes after a grace period of 5 years. What will be the new value of the firm, other things equal? Assume a borrowing rate of 6.7%.
(Do not round intermediate calculations. Enter your answer in million rounded to 2 decimal places.)