Ganad and Equity Risk Premiums. MariaGonzalez, Ganado's Chief FinancialOfficer, estimates therisk-free rate to be 3.70 %, thecompany's credit risk premium is 4.00%, the domestic beta is estimated at 0.93, the international beta is estimated at 0.61, and thecompany's capital structure is now 50% debt. Thebefore-tax cost of debt estimated by observing the current yield onGanado's outstanding bonds combined with bank debt is 8.30% and thecompany's effective tax rate is 35%. Calculate both the CAPM and ICAPM weighted average costs of capital for the following equity risk premium estimates.

a. 8.70

b. 7.70

c. 5.70

d. 4.60

Using the domesticCAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 8.70 %?

Using theICAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 8.70?

Using the domesticCAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 7.70?

Using theICAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 7.70?

Using the domesticCAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 5.70?

Using theICAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 5.70?

Using the domesticCAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 4.60?

Using theICAPM, what isGanado's weighted average cost of capital if thefirm's equity risk premium is 4.60?