the initial capital using debt. Suppose she funds the project by borrowing $560, in addition to selling equity. The debt is risk-free. a. According to MM Proposition I, what is the value of the levered equity? What are its cash flows if the economy is strong? What are its cash flows if the economy is weak? b. What is the return on equity for the unlevered and the levered investment? What is its expected return for the levered and unlevered investment? compare to the sensitivity of the unlevered equity return to systematic risk? How does its levered risk premium compare to the unlevered risk premium? d. What is the debt-equity ratio of the investment in the levered case? e. What is the firm's WACC in the levered case