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KP Company has a unlevered beta of 1.0. KP is financed with 50% debt and has a levered beta of 1.7. If the risk free
KP Company has a unlevered beta of 1.0. KP is financed with 50% debt and has a levered beta of 1.7. If the risk free rate is 6.5% and the market risk premium is 8%, how much additional premium that KPs stockholders require to be compensated for financial risk? Select one: a. 4.8% b. 5.2% c. 5.6% d. 6.1% e. 6.7%
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