Currently, Forever Flowers Inc. has a capital structure consisting of $30\%$ debt and $70\%$ equity. Forever's debt currently has an $8\%$ yield to maturity. The risk$-$free rate

$(r_{RF})$ is $3\%,$ and the market risk premium $(r_M-r_{RF})$ is $4\%.$ Using the CAPM, Forever estimates that its cost of equity is currently $14\%.$ The company has a $25\%$ tax

rate.

a$.$ What is Forever's current WACC? Round your answer to two decimal places.

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b$.$ What is the current beta on Forever's common stock? Round your answer to two decimal places.

c$.$ What would Forever's beta be if the company had no debt in its capital structure? $($That is$,$ what is Forever's unlevered beta, bu$?)$ Do not round intermediate

calculations. Round your answer to two decimal places.

Forever's financial staff is considering changing its capital structure to $40\%$ debt and $60\%$ equity. If the company went ahead with the proposed change, the

yield to maturity on the company's bonds would rise to $10\%.$ The proposed change will have no effect on the company's tax rate.

d$.$ What would be the company's new cost of equity if it adopted the proposed change in capital structure? Do not round intermediate calculations. Round your

answer to two decimal places.

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e$.$ What would be the company's new WACC if it adopted the proposed change in capital structure? Do not round intermediate calculations. Round your answer

to two decimal places.

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f$.$ Based on your answer to part e$,$ would you advise Forever to adopt the proposed change in capital structure?