The required return on XYZ stock can be estimated using the
Capital Asset Pricing Model (CAPM).
Keep in mind this approach is only one of many methods for
determining a required return.
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%.