a. Given the following information, please compute the expected return for Herbco:
10-year Treasury yield: 1.7%
10-year AAA Corporation Bond yield: 2.2%
5-year weekly beta for company stock: 1.40
Estimated Equity Risk Premium: 5.5%
Last 12-month change in the S&P 500 Index: 8.0%
(The answer to this part is 9.4%, I am just unsure how to achieve this solution)
b. What is the expected return of the overall market based on this information?