WSB Inc is an all-equity company with a market capitalization of $720 million and an expected return of 11.82% per year.

WSB is considering issuing 335 thousand bonds. At issuance, WSB will set the coupon rate to the YTM on bonds with similar characteristics and risks, which is 6.05%. The result will be the bonds will issue at their full face value of $1,000.

Assuming a world with no taxes and no bankruptcy, what financial risk premium should WSB's shareholders expect if WSB levers up?