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CAPM CALCULATION

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The required return on XYZ stock can be estimated using the
Capital Asset Pricing Model (CAPM).

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Keep in mind this approach is only one of many methods for
determining a required return.

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Once you have calculated a required return, you may use various
discounting methods for determining the fair value of a particular security.

In the box below, enter the beta for a particular stock and
an alert box will give you the required return, based on the historic market
risk premium of 6.6% and a risk free rate of 2.5%. NB: Click on [calculate CAPM] to obtain the required return. DO NOT press enter.