Please explain why the formula says Rf + beta (Rm - Rf), although the answer is 7% + 1.76 * (9%)"

Why isnt it 9%-7% = (2%)

The following table shows betas for several companies. Calculate each stock's expected rate of return using the CAPM. Assume the risk-free rate of interest is 7%. Use a 9% risk premium for the market portfolio. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Show transcribed data Expert Answer 100% (3 ratings) This solution was written by a subject matter expert. It's designed to help students like you learn core concepts. Anonymous answered this 21,582 answers Cost of capital (using CAPM) =Rf+[ beta * (RmRf)] Company Caterpillar. Cost of capital =7%+[1.76(9%)] =22.84%