Ganado's Cost of Capital.Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 4.00%, the company's credit risk premium is 4.00%, the domestic beta is estimated at 0.98, the international beta is estimated at 0.71, and the company's capital structure is now 40% debt. The expected rate of return on the market portfolio held by a well-diversified domestic investor is 8.80% and the expected return on a larger globally integrated equity market portfolio is 7.60%. The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is 8.00% 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 capital