Question: Problem 13-2 (algorithmic) Question Help Ganado and Equity Risk Premiums 4 40%, the domestic beta is estimated at 0 96, the international beta is estimated
Problem 13-2 (algorithmic) Question Help Ganado and Equity Risk Premiums 4 40%, the domestic beta is estimated at 0 96, the international beta is estimated at 0.67, and the company's capital structure is now 45% debt. The befo tax cost of debt estimated by observing the current yield on Ganados outstanding bonds combined with bank debt is 8.40% and the company's effective tax rate is 38%, Cal late both the CAPM and ICAPM weighted average costs of capital for the following equity risk premium estimates s. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.80%, the company's credit risk a. 780% b. 6.90% c.490% d. 3.90% a. Using the domestic CAPM, what is Ganado's weighted average cost of capital if the firm's equity risk premium is 780%? ?% (Round to two decimal places.)
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