Currently, Bloom Flowers has a capital structure consisting of 20% debt and 88% equity Blooms stock has an 8% yield to maturity The risk free rate is 5% and the market risk premium is 6%. Using CAPM, Bloom estimates that the cost of equity is currently 12.5% The company has a 40% tax rate.,,a) What is Blooms current WACC,B)What is the current beta on Bloom’s common stock ?,c) What woud Bloom’s beta be if the company had no debt in it’s capital structure?(That is what is Bloom’s unlevered beta ? )
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