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Premium for Financial Risk Ethier Enterprise has an unlevered beta of 0.5. Ethier is financed with...

Premium for Financial Risk

Ethier Enterprise has an unlevered beta of 0.5. Ethier is financed with 50% debt and has a levered beta of 0.8. If the risk free rate is 6.5% 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 one decimal place.

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Answer Enterprise has an unlevered beto -0.5 Financed with 50% devered beta : 08. The risk free rate = 65% 1. The moorket risthe required return delt 00065 +0.84.0.04 = 0.097% The entra premium required for financial srish -0.0977. - 0.085% 20.01

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