Good Evening!

Can you explain how to solve for this question?

The estimated factor sensitivities of Kraft Heinz Company (KHC) to Fama-French factors and the risk premia associated with those factors are given in the table below:

Factor Sensitivity Risk Premium

Market factor 0.9 3.20%

Size factor -1.2 4.50%

Value factor 1.3 6.50%

The treasury bill rate is 3.5%. Calculate the required return for KHC using the Fama-French model.

1) 20.23%

2) 13.55%

3) 10.26%

4) 9.43%