Problem 13-4 (algorithmic) Question Help O Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.50%, the company's credit risk premium is 3.90%, the domestic beta is estimated at 1.06, the international beta is estimated at 0.75, and the company's capital structure is now 45% debt. The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is 8.60% 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. a. 8.70% b. 7.70% c. 5.70% d. 4.60%