Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate...

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Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.90%, the company's credit risk premium is 3.80%, the domestic beta is estimated at 1.02, the international beta is estimated at 0.77, and the company's capital structure is now 40% debt. The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is 8.20% and the company's effective tax rate is 30%. Calculate both the CAPM and ICAPM weighted average costs of capital for the following equity risk premium estimates. a. 8.30% b. 7.40% c. 5.60% d. 4.50% a. Using the domestic CAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 8.30%? % (Round to two decimal places.) Using the ICAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 8.30%? 1% (Round to two decimal places.) b. Using the domestic CAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 7.40%? 1% (Round to two decimal places.) Using the ICAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 7.40%? % (Round to two decimal places) premium is 5.60%? 1% (Round to two decimal places.) Using the ICAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 5.60%? 1% (Round to two decimal places.) d. Using the domestic CAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 4.50%? % (Round to two decimal places.) Using the ICAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 4.50%

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