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Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.40%, the company's credit risk premium is 3

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Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.40%, the company's credit risk premium is 3 70% the domestic beta is estimated at 0.95, the international beta is estimated at 0.61, and the company's capital structure is now 25% debt. The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is 790% and the company's effective tax rate is 40% Calculate both the CAPM and ICAPM weighted average costs of capital for the following equity risk premium estimates a. 8.50% b. 7 50% c.5,60% d. 4 70% a. Using the domestic CAPM what is Ganado's weighted average cost of capitat If the firm's equity risk premium is 8.50%? (% (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 8 50%? 0% (Round to two decimal place) I b. Uning the domestic CAPM, what is Ganado's weighted average cost of capitat if the firm's equity risk premium is 7.60%? 1% Round to two decimal places) Using the ICAPM, whatin Ganado's weighted average cost of capitat if the firm's equity risk premium is 7 60%? % Round to two de dental plan) c. Using the domestic CAPM what is Ganado's weighted average cost of capital if the firm's equity risk premium is 5.60%? % (Round to two decimal places) Using the CAPM what is Gunado's weighted average cost of capital the 's equity riak premium is 5 60%? % Round to two decimal places) 4. Using the domestic CAPM, what is Ganado's weighted average cost of capital the tom equally riak premium is 4. 7092 * (Round to two decent places) Using the ICAPM What is Cardo's weighted average cost of capital of the equity risk peekom is (Round to two decimal places)

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