You own stock in the Gentry Company, and you read in the financial press that a recent bond offering has raised the firm's debt/equity ratio from 35...

income stream, other factors being constant. Discuss how the change would affect your required rate of return on the common stock of the Gentry Company.Explain why you would change your nominal required rate of return if you expected the rate of inflation to go from 0 (no inflation) to 4 percent. Give an example of what would happen if you did not change your required rate of return under these conditions.

10. You own stock in the Gentry Company, and you read in the financial press that arecent bond offering has raised the firm’s debt/equity ratio from 35 percent to 55percent. Discuss the effect...