Required Rate of Return Calculator
Required Rate of Return:
Formula: Required Rate of Return = (Net Cash Flow / Investment Amount) × 100
Required Rate of Return Calculator | ||
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Parameter | Description | Example Value |
Risk-Free Rate (Rf) | The return on a risk-free investment, such as government bonds. | 2% |
Beta (β) | The measure of a stock’s volatility relative to the market. | 1.2 |
Market Return (Rm) | The expected return of the market. | 8% |
Required Rate of Return (RRR) | The minimum return an investor expects to achieve on an investment. Formula: Rf + β(Rm – Rf) |
9.2% |