Required rate of return formula with beta
Investors and corporations use required rate of return, or RRR, to . The company might further modify RRR to include a stock's “beta,” which is a measure of risk. To calculate the annual return, you use the formula for the “ geometric mean,” The return on the market is 11% and the risk-free rate is 6%. If the capital asset pricing model (CAPM) is used for calculating the required rate of return, which