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Calculate both the capm and icapm weighted average cost

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Reference no: EM133113005

Calculate both the CAPM and ICAPM weighted average cost of capital for the following equity risk premium estimate: 7%:

**Please show work**

Assumptions

Domestic

International

Beta

1.5

0.85

Risk Free Rate

3.60%

3.60%

Credit Risk Premium

7.00%

7.00%

Cost of Debt

11.60%

11.60%

Tax rate

35.00%

35.00%

Return on market portfolio

9.00%

8.00%

Proportion of debt

30.00%

30.00%

Proportion of equity

70.00%

70.00%

Cost of debt

8.00%

8.00%

Cost of equity

9.27%

7.34%

Reference no: EM133113005

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