The following is a problem and below it is the solution. I just need help trying to understand the concept. I tried doing the calculation on a calculator but I get confused with the % signs and I get a completely different answer. so, how do you add 3.15% + 1.75 on a calculator? also, how do you subtract 5.59% - 3.15%?

thanks.

King Farm Manufacturing Companys common stock has a beta of 1.74. If the risk-free rate is 3.15 percent, and the market return is 5.59 percent, calculate the required return on King Farm Manufacturings common stock.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)

For this problem we are using CAPM SML formula:

The required rate of return = Risk free rate + Beta* (Market return Risk free rate)

The required rate of return = 3.15% + 1.74*(5.59% - 3.15%) = 7.40%