From Equity Book, the following formulas can be cited:

(i) Required return on equity = Current expected risk-free return + Equity risk premium

(ii) Required return on share i=Current expected risk-free return +βi(Equity risk premium)

Now please tell me that the subtle difference in the above formulas. If (i) and (ii) is equal, then βi(Equity risk premium)= Equity risk premium

From my understanding goes:

**Equity risk premium= βi (Market Return- Risk free Return)** [(Market Return- Risk free Return)= Market Risk Premiun]

And the 2nd Formula should be written as:

Required return on share i=Current expected risk-free return +βi(Market risk premium)

Very Easy topic. But please Clarify.