Question
Premium for Financial Risk Ethier Enterprise has an unlevered beta of 1.25. Ethier is financed with 45% debt and has a levered beta of 1.55.
Premium for Financial Risk
Ethier Enterprise has an unlevered beta of 1.25. Ethier is financed with 45% debt and has a levered beta of 1.55. If the risk free rate is 4.5% 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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Technical Analysis Of Stock Trends
Authors: Robert D. Edwards, John Magee
6th Edition
1599180219, 978-0139043437
