Currently, Forever Flowers Inc. has a capital structure consisting of 30% debt and 70% equity. Forever's...

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Currently, Forever Flowers Inc. has a capital structureconsisting of 30% debt and 70% equity. Forever's debt currently hasan 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 iscurrently 14.5%. The company has a 40% tax rate. The data has beencollected in the Microsoft Excel Online file below. Open thespreadsheet and perform the required analysis to answer thequestions below. Do not round intermediate calculations.
What is Forever's current WACC? Round your answer to two decimalplaces.
%
What is the current beta on Forever's common stock? Round youranswer to two decimal places
What would Forever's beta be if the company had no debt in itscapital structure? (That is, what is Forever's unlevered beta,b_U?) Round your answer to two decimal places.
Forever's financial staff is considering changing its capitalstructure to 40% debt and 60% equity. If the company went aheadwith the proposed change, the yield to maturity on the company'sbonds would rise to 10%. The proposed change will have no effect onthe company's tax rate.
What would be the company's new cost of equity if it adopted theproposed change in capital structure? Round your answer to twodecimal places.
%
What would be the company's new WACC if it adopted the proposedchange in capital structure? Round your answer to two decimalplaces.

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Currently, Forever Flowers Inc. has a capital structureconsisting of 30% debt and 70% equity. Forever's debt currently hasan 8% yield to maturity. The risk-free rate (rRF) is 3%,and the market risk premium (rM - rRF) is 4%.Using the CAPM, Forever estimates that its cost of equity iscurrently 14.5%. The company has a 40% tax rate. The data has beencollected in the Microsoft Excel Online file below. Open thespreadsheet and perform the required analysis to answer thequestions below. Do not round intermediate calculations.What is Forever's current WACC? Round your answer to two decimalplaces.%What is the current beta on Forever's common stock? Round youranswer to two decimal placesWhat would Forever's beta be if the company had no debt in itscapital structure? (That is, what is Forever's unlevered beta,bU?) Round your answer to two decimal places.Forever's financial staff is considering changing its capitalstructure to 40% debt and 60% equity. If the company went aheadwith the proposed change, the yield to maturity on the company'sbonds would rise to 10%. The proposed change will have no effect onthe company's tax rate.What would be the company's new cost of equity if it adopted theproposed change in capital structure? Round your answer to twodecimal places.%What would be the company's new WACC if it adopted the proposedchange in capital structure? Round your answer to two decimalplaces.