Question
Ethier Enterprise has an unlevered beta of 1.15. Ethier is financed with 45% debt and has a levered beta of 1.25. If the risk free
Ethier Enterprise has an unlevered beta of 1.15. Ethier is financed with 45% debt and has a levered beta of 1.25. If the risk free rate is 4% and the market risk premium is 4%, 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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Personal Finance Turning Money Into Wealth
Authors: Arthur J. Keown
6th Edition
0132719169, 978-0132719162
