CAPM Calculator
Calculate the expected return of an investment based on systemic risk and risk-free rates.
Calculation Parameters
Specify your inputs below.
Calculated Result
Expert Tip
The CAPM model determines whether an asset is priced fairly based on its systematic market risk beta.
How this Calculator Works
This calculator estimates the expected return of an asset using the Capital Asset Pricing Model (CAPM). It links the asset's risk (represented by Beta) to the expected market return and the risk-free rate of return. Portfolio managers use it to determine hurdle rates for equity investments.
Formula & Methodology
Step-by-Step Calculation Example
Here is a step-by-step example showing how the calculations are performed:
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Detailed Insights & Expert Guide
โน๏ธ About this Calculation
This equity research and valuation calculator evaluates corporate fundamentals, stock price multiples, cost of capital, dividend discount models, and shareholder return metrics based on SEC financial reporting and Wall Street equity analysis standards.
Variable Glossary
Equity Inputs
Share price, earnings per share (EPS), dividend amount, book value, debt/equity ratio, or systematic beta coefficient.
Valuation Output
Price-to-Earnings (P/E), EV/EBITDA multiple, Intrinsic Value ($), WACC %, or Return on Equity (ROE %).
How to Calculate Step-by-Step
Step 1
Input current stock price, shares outstanding, or balance sheet / income statement numbers.
Step 2
Enter expected growth rate, cost of equity, or market risk premium assumptions.
Step 3
Review calculated valuation multiples, margin of safety comparison, or required rate of return.