Question: Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): r RF = 2%; r M = 8%; RP M =

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

r_RF = 2%; r_M = 8%; RP_M = 6%, and beta = 1.2

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

____ %

If inflation increases by 2% but there is no change in investors' risk aversion, what is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places.

____ %

Assume now that there is no change in inflation, but risk aversion increases by 2%. What is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places.

____ %

If inflation increases by 2% and risk aversion increases by 2%, what is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places.

____ %

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