Details of this Paper

how much is the additional premium that Ethier?s shareholders require to be compensated for financial risk?

Description

solution


Question

Ethier Enterprise has an unlevered beta of 1.0. Ethier is financed with 50% debt and has a levered beta of 1.6. If the risk-free rate is 5.5% and the market risk premium is 6%, how much is the additional premium that Ethier?s shareholders require to be compensated for financial risk?

 

Paper#33116 | Written in 18-Jul-2015

Price : $32
SiteLock