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Problem 15-03 Premium for Financial Risk Ethier Enterprise has an unlevered beta of 1.1. Ethier is financed with 40% debt and has a levered beta

Problem 15-03 Premium for Financial Risk

Ethier Enterprise has an unlevered beta of 1.1. Ethier is financed with 40% debt and has a levered beta of 1.2. If the risk free rate is 6% 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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