Ganado's Cost of Capital.Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.70%, the company's credit risk premium is 3.60%, the domestic beta is estimated at 1.07, the international beta is estimated at 0.83, and the company's capital structure is now 65% debt. The expected rate of return on the market portfolio held by a well-diversified domestic investor is 9.50% and the expected return on a larger globally integrated equity market portfolio is 8.70%.

The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is 8.10% and the company's effective tax rate is 35%.

For both the domestic CAPM and ICAPM, calculate the following:

a. Ganado's cost of equity

b. Ganado's after-tax cost of debt

c. Ganado's weighted average cost of capitala. Using the domestic CAPM, what is Ganado's cost of equity? 9.93% (Round to two decimal places.) Part 2 Using the ICAPM, what is Ganado's cost of equity? enter your response here%

a. Using the domestic CAPM, what is Ganado's cost of equity?

9.939.93%

(Round to two decimal places.)

Part 2

b. Using the ICAPM, what is Ganado's cost of equity?

enter your response here%

(Round to two decimal places.)