2. You are in the frictionless economy as MM theory assumes. a) Fill out the blank: r = ? B. = 1.8 D = 7% Bo ? 11% r = ? A B. ? D/V = 0.4 E r F 5% r M b) Suppose now this firm issue more debt so that D/V=0.6. The reduced borrowing causes rd to increase to 9%. How do the other variables (BD, BE, r'a, re) change