Question
Ethier Enterprise has an unlevered beta of 1. Ethier is financed with 60% debt and has a levered beta of 1.1. If the risk free
Ethier Enterprise has an unlevered beta of 1. Ethier is financed with 60% debt and has a levered beta of 1.1. If the risk free rate is 5.5% and the market risk premium is 6%, how much is the additional premium that Ethier's shareholders require to be compensated for financial risk? Round your answer to two decimal places.
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Essential Mathematics For Economic Analysis
Authors: Knut Sydsaeter, Peter Hammond
3rd Edition
0273713248, 9780273713241
