Question: 8. More CAPM and MM for your fun. . . repetita iuvant - Archimedes Levers is financed by a mix of (risky) debt and equity.

8. More CAPM and MM for your fun. . . repetita iuvant - Archimedes Levers is financed by a mix of (risky) debt and equity. You have the following information about its cost of capital: TE=... rD = 12% TA=. BE = 1.5 BD =... BA = ... rf = 10% TM = 18% (D/V) = 0.5 (a) Can you fill in the blanks? (b) Look back to question (a). Suppose now that Archimedes repurchases debt and issues equity so that eventually (D/V) = 0.3. The reduced borrowing causes ro to fall from 12% to 11%. How do the other variables in the table change

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