Solved: Shareholder require to be compensated for finanical risk, Finance Basics

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Shareholder require to be compensated for finanical risk

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 Either's shareholder require to be compensated for finanical risk?

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Finance Basics: Shareholder require to be compensated for finanical risk

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