Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.00%, the company's credit risk premium is 4.20%,

the domestic beta is estimated at 0.94, the international beta is estimated at 0.62, 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 8.00% 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.

debt.

a. 8.20%

b. 7.10%

c. 4.90%

d. 3.90%