Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE):
rRF = 5%; rM = 9%; RPM = 4%, 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 2% 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
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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 2% 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
%