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Currently, Bloom Flowers Inc. has a capital structure consisting of 20 percent debt and 80 percent equity. Bloom's debt currently has an 8 percent yield

Currently, Bloom Flowers Inc. has a capital structure consisting of 20 percent debt and 80 percent equity. Bloom's debt currently has an 8 percent yield to maturity. The risk-free rate (rRF) is 5 percent, and the market risk premium (rM-rRF) is 6 percent. Using the CAPM, Bloom estimates that its cost of equity is currently 12.5 percent. The company has a 40 percent tax rate. a. What is Bloom's current WACC? b. What is the current beta on Bloom's common stock? c. What would Bloom's beta be if the company had no debt in its capital structure? (That is, what is Bloom's unlevered beta?)

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