Question
Ethier Enterprise has an unlevered beta of 1.05. Ethier is financed with 40% debt and has a levered beta of 1.35. If the risk free
Ethier Enterprise has an unlevered beta of 1.05. Ethier is financed with 40% debt and has a levered beta of 1.35. If the risk free rate is 6.5% 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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International Finance A Survey
Authors: H. Kent Baker, Leigh A. Riddick
1st Edition
0199754659, 978-0199754656
