1. Estimation of Beta(B) and Expected Rate of Return (Rs) for Walmart and Visa

The beta of a stock determines the risk a stock has within a stock portfolio. It is used in part with the Capital Asset Pricing Model (CAPM) which is an alternate way of calculating expected rate of return on a stock.

E() = + (- )

Where, = the return on a particular company stock

= the risk-free rate,

= the beta of the stock, and

= the market risk premium.

The achieved rate of return on a stock (Rs) is calculated as

= 01 + 10 0 or

K = +

¹

Where, = 0 is the Dividend yield of a particular companys stock and

¹

= 0 is the Capital gain of a particular companys stock

The market risk premium of a companys stock () = ₁ ¹

Where, DJIA is Dow Jones Industrial Average t is current time and t-1 is previous time.

The risk-free premium from the US Treasury as of May 2023 is 5.07%. This will be used for the calculations in this paper.