The sML line can change due to expected inflation and nisk zversion. If innabion changes, then the SML ploted on a graph will shit Lp or down paralle to the ald 5ML. If riak averion changes, then the 5ML ploteed on a graph wit rotate up or doen becoming more or less stcep it investors become more or less risk averse. A firm can influence market risk (hence its beta coencent) through changes in the composition of is awsets and through changes in the amount of debt is uses. Quantitative Problem: You are given the following informution for Wine bnd Cork Emerphises (WCE): What is WCe's required rate of retum? bo not round intermediate calculations. Round your ansaer to twe decimal places. If inflation increases by 3% but there is no change in invettors' risk avenson, what is wCE's required rate of returs now? Do not round intermed ate caiculations. Round your answer to two decimil places- Assume now tout there is no change in inflation, but risk aversion increases by 1 th. What is wce's required rate of return now? Do not round intermedate calculasiont. Round vour answer to two decimal places Ef infiven increases by 3% and risk aversion increases by 1 W, what is WCE's required rase of return now? Do not round intermediate caiculations. Round your answer to two decimal giacea