What is Genedak-Hogan's cost of equity before international diversification of its operations without the hypothetical additional risk premium?

Problem 13-12 (algorithmic) Question Help Genedak-Hogan Cost of Equity. Use the table in the popup window, E, to answer the problem. Genedak-Hogan (G-H) is an American conglomerate that is actively debating the impacts of international diversification of its operations on its capital structure and cost of capital. The firm is planning on reducing consolidated debt after diversification. Senior management at Genedak-Hogan is actively debating the implications of diversification on its cost of equity. All agree that the company's returns will be less correlated with the reference market return in the future, the financial advisors believe that the market will assess an additional 3.1% risk premium for "going international" to the basic CAPM cost of equity. Calculate Genedak-Hogan's cost of equity before and after international diversification of its operations, with and without the hypothetical additional risk premium, and comment on the discussion. What is Genedak-Hogan's cost of equity before international diversification of its operations without the hypothetical additional risk premium? Data Table - (Click on the icon to import the table into a spreadsheet.) Before Diversification 0.93 After Diversification 0.76 24.4% 29.6% 18.9% 3.2% 18.9% 3.2% Assumptions Correlation between G-H and the market Standard deviation of G-H's returns Standard deviation of market's returns Risk-free rate of interest Additional equity risk premium for internationalization Estimate of G-H's cost of debt in U.S. market Market risk premium Corporate tax rate Proportion of debt Proportion of equity Symbol Pim j om kof RPM ka km - Kit t D/V EIV 3.1% 6.8% 5.4% 0.0% 7.4% 5.4% 42% 35% 65% 42% 29% 71%