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( 5 points ) The company has an unlevered beta of 1 . 0 , it is financed with 5 0 % debt and 5

(5 points) The company has an unlevered beta of 1.0, it is financed with 50% debt and
50% common stock. The company's levered beta is 1.6. If the risk free rate is 5.5%, the
market risk premium is 6%, calculate the additional premium that company's
shareholders require for undertaking the financial risk of the company.
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