Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE):
rRF = 2%; rM = 9%; 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 2%. 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 2%, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations.
___________%