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How much is premium that ethiers shareholder require

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Reference no: EM13521915

Question: Ethier Enterprise has an unlevered beta of 1.1. Ethier is financed with 45% debt and has a levered beta of 1.2.

If the risk free rate is 5% and the market risk premium is 7%, how much is the additional premium that Ethier's shareholders require to be compensated for financial risk? Round your answer to two decimal places.

Reference no: EM13521915

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