Please provide solution to Problem 10 - chapter 13 of Multinational Business Finance 14th edition

not sure how to tackle this one

Genedak-Hogan Use the table below to answer Problem. Genedak-Hogan 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 aften diversification Before After Assumptions ymbol Diversification Diversification Correlation between G-H and the market Pjm 0.88 0.76 Standard deviation of G-H's returns 28.0% 26.0% Standard deviation of market's returns m 18.0% 1 8.0% Risk-free rate of interest krf 3.0% 3.0% Additional equity risk premium for internationalization RPM 0.0% 3.0% Estimate of G-H's cost of debt in U.S. market kd 7.2% 7.0% Market risk premium km -krf 5.5% 5.5% Corporate tax rate 35.0% 35.0% Proportion of debt 38% 32% Proportion of equity EV 6296 68% Genedak-Hogan Cost of Equity. Senior management at Genedak-Hogan are 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 3.0% 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