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EverShine was an unlevered company with beta of 1.25. It decided to borrow money and buyback stock with the proceeds. Cost of equity capital went

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EverShine was an unlevered company with beta of 1.25. It decided to borrow money and buyback stock with the proceeds. Cost of equity capital went up by 9% after levering to a debt to value ratio of 0.5. Debt is risk free. Tax rate is zero. Depreciation level is $ 50 Million per year. EBIT is $ 875 Million per year. How much is the market risk premium

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