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please find the CAPM and ICAPM for A, B, C, D. i dont care about the steps. Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's
please find the CAPM and ICAPM for A, B, C, D.
Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.20%, the company's credit risk premium is 4.50%, the domestic beta is estimated at 1.01 , the international beta is estimated at 0.75 , and the company's capital structure is now 40% debt. The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is 7.90% and the company's effective tax rate is 42%. Calculate both the CAPM and ICAPM weighted average costs of capital for the following equity risk premium estimates. a. 8.70% b. 7.80% c. 6.00% d. 5.10% i dont care about the steps.
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