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Currently, Bloom Flowers Inc. has a capital structure consisting of 20% debt and 80% equity. Blooms debt currently has an 9.4% yield to maturity. The
Currently, Bloom Flowers Inc. has a capital structure consisting of 20% debt and 80% equity. Blooms debt currently has an 9.4% yield to maturity. The risk-free rate (rRF) is 2%, and the market risk premium (rM rRF) is 6.6%. Using the CAPM, Bloom estimates that its cost of equity is currently 16.8%. The company has a 25% tax rate.
What would Blooms beta be if the company had no debt in its capital structure? (That is, what is Blooms unlevered beta, bU?)
please round to 4 decimal places
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