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What is cost of equity calculator (CAPM model)?

‘ Cost of Equity Calculator ( CAPM Model)’ calculates the cost of equity for a company using the formula stated in the Capital Asset Pricing Model. The cost of equity is the perceptional cost of investing equity capital in a business. Interest is the cost of utilizing borrowed money. For equity, there is no such direct cost available.

How is CAPM calculated?

The CAPM formula requires the rate of return for the general market, the beta value of the stock, and the risk-free rate. The weighted average cost of capital (WACC) is calculated with the firm's cost of debt and cost of equity—which can be calculated via the CAPM.

How do I use the capital asset pricing model (CAPM) calculator?

You can use this Capital Asset Pricing Model (CAPM) Calculator to calculate the expected return of a security based on the risk-free rate, the expected market return and the stock's beta. Complete the form below and click "Calculate" to see the results.

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