Using Past Information to Estimate Required Returns In the Capital Asset Pricing Model (CAPM) discussion, beta is identified as the correct measure of risk for diversified shareholders. Recall that beta measures the extent to which the returns of a given stock move with the stock market. When using the CAPM to estimate required returns, we would ideally like to know how the stock will move with the market in the future, but because we dont have a crystal ball we generally use historical data to estimate this relationship. As noted in the chapter, beta can be estimated by regressing the individual stocks returns against the returns of the overall market. As an alternative to running our own regressions, we can instead rely on reported betas from a variety of sources. These published sources make it easy to obtain beta estimates for most large publicly traded corporations. However, a word of caution is in order. Beta estimates can often be quite sensitive to the time period in which the data are estimated, the market index used, and the frequency of the data used. Therefore, it is not uncommon to find a wide range of beta estimates among the various published sources. Indeed, Thomson ONE reports multiple beta estimates. These multiple estimates reflect the fact that Thomson ONE puts together data from a variety of different sources. Return to the overview page for the stock you selected. If you scroll down the page you should see an estimate of the companys beta. What is the companys beta? What was the source of the estimated beta