Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.80 %3.80%, the company's...
Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be
3.80 %3.80%,
the company's credit risk premium is
3.703.70%,
the domestic beta is estimated at
0.980.98,
the international beta is estimated at
0.810.81,
and the company's capital structure is now
4545%
debt. The before-tax cost of debt estimated by observing the current yield on Ganado's outstanding bonds combined with bank debt is
8.508.50%
and the company's effective tax rate is
3939%.
Calculate both the CAPM and ICAPM weighted average costs of capital for the following equity risk premium estimates.
a.
8.608.60%
b.
7.707.70%
c.
5.705.70%
d.
4.704.70%
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Maria Gonzalez, Ganado's Chief Financial Officer, estimates
the risk-free rate to be
3.80 %3.80%,
the company's...
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