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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 4.50%,

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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 4.50%, the domestic beta is estimated at 1.09 , the international beta is estimated at 075 , and the company's capital structure is now 75% debt. The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is 840% and the company's effective tax rate is 38%. Calculate both the CAPM and ICAPM weighted average costs of capital for the following equity risk premium estimates a. 8.10% b. 7.10% c. 5.10% d. 4.00% a. Using the domestic CAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 8. 10% ? 7.09% (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 8.10% ? % (Round to two decimal places.)

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