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Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): FRF = 5%; r = 9%; RPM = 4%, and beta
Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): FRF = 5%; r = 9%; RPM = 4%, and beta = 1.1 What is WCE's required rate of return? Round your answer to 2 decimal places. Do not round intermediate calculations. 9.40 % Show All Feedback If inflation increases by 2% but there is no change in investors' market risk premium, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. 11.40 % Show All Feedback Assume now that there is no change in inflation, but market risk premium increases by 2%. What is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. 12.70 % Hide Feedback Incorrect Check My Work Feedback Review the SML equation to calculate the stock's required return. Be sure to follow the correct order of mathematical operations. Remember the impact of risk aversion on the SML equation. If inflation increases by 2% and market risk premium increases by 2%, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. 13.60 % Show All Feedback
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