Expected return on tangier stock

Question

Problem:

Tangier Manufacturing's common stock has a beta of 1.8. If the expected risk free return is 5% and the expected return on the market is 16%,

Required:

Question: What is the expected return on Tangier's stock?

• 13.5%
• 19.8%
• 24.8%
• 28.8%

Note: Please explain comprehensively and give step by step solution.