Question
Premium for Financial Risk Ethier Enterprise has an unlevered beta of 1.15. Ethier is financed with 60% debt and has a levered beta of 1.45.
Premium for Financial Risk
Ethier Enterprise has an unlevered beta of 1.15. Ethier is financed with 60% debt and has a levered beta of 1.45. If the risk free rate is 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?
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The Principals Guide To School Budgeting
Authors: Richard D. Sorenson, Lloyd M. Goldsmith
3rd Edition
1506389457, 978-1506389455
