Let's estimate the "required return" for MCD. Here are the historic returns for various asset classes.

	Compounding	N	I/YR	PV	PMT	FV
Small Stocks	1 orange PMT	89	12.17	$1.00	0.00	$27,419.32
Large Stocks (S&P500)	the "Market"	89	10.12	$1.00	0.00	$5,316.85
LT Govt Bonds		89	5.67	$1.00	0.00	$135.18
T-Bills	"Risk-free"	89	3.47	$1.00	0.00	$20.58
Inflation		89	2.93	$1.00	0.00	$13.10

Use this equation to estimate the "required return" for MCD; that is, Rs.

Rs=Rf+beta*(Rm-Rf)

Rs=Required return of the stock Rf=Risk-free rate Rm=Return on the "Market"