MEASURING VALUEINTRODUCTIONThe purpose of this report is to understand the Canadian stock market and evaluate the stock prices of the following six Canadian companies: Bank of Montreal, Toronto-Dominion Bank, Canadian Tire , Sears, Husky Energy and Petrol Canada. We used ten years of data to examine the prices of these six Canadian companies according to the Security Market Line theory. The stock prices of these companies were taken from Yahoo Finance and MSN Finance. The simple linear regression method was used to calculate the risk premium and beta. Bank of Montreal (BMO) BMO Financial Group is one of the largest financial services providers in North America, offering comprehensive retail banking, wealth management and investment banking products, services and solutions. .According to historical TSX data obtained from Yahoo Finance, the arithmetic method was used to average BMO stock returns at 5.19% (Figure 1) based on semi-annual prices over the 10-year period. The same method was also adopted to calculate the average compensation prices equal to 4.02% (Figure 1). Beyond the simple linear regression offered, the way beta was calculated, at 0.5177 (Figure 1) less than 1, indicated relatively low risk for the markets. Alpha 0.0311 (Figure 1) was also highlighted after inserting the point (4.02%, 5.19%) into the linear function y=a + 0.5177x (Figure 1). Furthermore, according to the RRR (Required Rate of Return) formula, we could easily get the average RRR of BMO which is 3.58%. Most importantly, compared to the average return of BMO, it was obvious that the RRR, 3.58% was lower than the average return of stocks on the TSX market, 5.19%. Therefore, the value of BMO shares was undervalued, which meant that the benefit gained for investors was higher than their expectations. Toronto-Dominion BankToronto-Dominion Bank is the personal, small business and commercial banking operation of Toronto-Dominion Bank offering a range of financial products and services to more than 10 million customers across Canada through more than 1,000 branches and 2,700 ATMs. From 1997 to 2007, the average returns of TD stock were calculated as 6.22% (Figure 2) based on semi-annual prices. Since both BMO and TD came from the TSX market, the average compensation return should be treated the same as the result we recovered for BMO, 4.02% (Figure 2). Furthermore, TD's beta was 0.6757 (Figure 2) less than 1 but very similar to BMO's 0.5177 data which also demonstrated lower risk than the market average.