How much is the additional premium for financial risk

Reference no: EM132048248

Question: Premium for Financial Risk

Ethier Enterprise has an unlevered beta of 1.15. Ethier is financed with 45% debt and has a levered beta of 1.55. If the risk free rate is 4% and the market risk premium is 4%, 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: EM132048248

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