Problem:
Neighborhood Stores' stock has a risk premium of 9.6 percent while the inflation rate is 3.1 percent and the risk-free rate is 3.8 percent.
Required:
Question: What is the expected return on this stock?
A) 12.3 percent
B) 12.7 percent
C) 13.4 percent
D) 13.6 percent
E) 16.5 percent
Note: Please show guided help with steps and answer.