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Ganado and Equity Risk Premiums. Maria Conzalez, Ganado's Chief Financial Oficet, estmates the risk-free rase to be 3 so%, the corrpany's credt risk premium is

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Ganado and Equity Risk Premiums. Maria Conzalez, Ganado's Chief Financial Oficet, estmates the risk-free rase to be 3 so\%, the corrpany's credt risk premium is 3 7o\%, the domeabe beta is estimated at 1.09, the international beta is estimated at 0.82, and the company's capital structure is now 65% debt. The belore-tax cost of debt esimosed by observing the current yield on Garadol outstanding bonds combined with bank dobt is 8.60% and the company's effective tax rate is 30%. Calculate both the CAPM and ICAPM woighted average costs of copital for the following equity risk premium estifiates. a. 8.00\% b. 6.90%2 c. 4.70% d. 3.70% a. Using the demestic CAPM, what is Ganado's weighted average cost of capial if the Irmis equily risk premum is 8.000 ? (Round to two decimal places.) Using the ICAPM, what is Ganade's weighted averege cost of capital it the fem's equity risk peominm is 8.0005 ? W. (Round te two decimal places.) b. Using the domestic CAPM, what is Ganado's weighted average cost of capitai it the firm's equily risk premium is 6.90 ? (Round to two decimal places.) Using the ICAPM, what is Ganado's weighted average cost of capital it the firm's equty riek premium is 6.90% ? is (Round to two decimal places) c. Using the domosso CAPM, what is Ganado's weighted average cost of capital it the frmis equiy nisk premium is 4.70\%? (Round to two decimal places.) Using the ICAPM, what is Ganado's weighted avenage cost of capial if the ferm's equity risk premimm is 4.70\%

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