If inflation increases by 1 but there is no change in


Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE):

rRF = 3%; rM = 10%; RPM = 7%, and beta = 1.4

What is WCE's required rate of return? Round your answer to 2 decimal places. Do not round intermediate calculations. %

If inflation increases by 1% but there is no change in investors' risk aversion, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %

Assume now that there is no change in inflation, but risk aversion increases by 1%. What is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %

If inflation increases by 1% and risk aversion increases by 1%, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %

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Financial Management: If inflation increases by 1 but there is no change in
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