Ganado's Cost of Capital. XMaria Gonzalez, Ganado's Chief Financial Officer, estimates the risk$-$free rate to be $3\mathrm{.}80\%,$ the company's credit risk premium is $3\mathrm{.}60\%,$

the domestic beta is estimated at $0\mathrm{.}98,$ the international beta is estimated at $0\mathrm{.}71,$ and the company's capital structure is now $30\%$ debt. The expected rate of return on

the market portfolio held by a well$-$diversified domestic investor is $9\mathrm{.}50\%$ and the expected return on a larger globally integrated equity market portfolio is $8\mathrm{.}60\%.$

The before$-$tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is $7\mathrm{.}80\%$ and the company's effective

tax rate is $39\%.$ 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 capital

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

$\%($Round to two decimal places.$)$