Bloom Software Co. is trying to estimate its optimal capital structure. Bloom's current capital structure consists of 25% debt and 75% equity; however, management believes the firm should use more debt. The risk-free rate is 4%, the market risk premium is 8% and the firm's tax rate is 35%. Currently, Bloom's cost of equity is 20%. 12. What is Bloom's current beta factor? A. b=2.0 B. b=1.8 C. b=4.0 D. b=3.0 13. What is Bloom's business risk? A. b=2.48 B. b=1.84 C. b=3.28 D. b=1.31 14. What would Bloom's beta factor if it were to change its capital structure to 50% debt and 50% equity A. b=2.28 B. b=5.41 C. b=2.16 D. b=2.71 15. What would be Bloom's estimated cost of equity with the new capital structure? A. 21.3% B. 22.3% C. 25.7% D. 47.3%