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Corporate Finance · Cost of Capital
CAPM Cost of Equity Calculator
The Capital Asset Pricing Model in its simplest, most usable form, plot your asset's systematic risk against the Security Market Line and read off its implied cost of equity.
Reading This Tool
How To Use This Calculator
Enter the current risk-free rate (a government bond yield is the usual proxy), the asset's beta, and your expected return on the overall market.
The dot on the chart shows exactly where your asset sits on the Security Market Line, further right means more market risk, and a higher return required to justify holding it. The Cost of Equity figure is what should feed directly into a WACC calculation next.
Your Inputs
CAPM Result
Cost of Equity (Ke)
0.00%
Equity Risk Premium
0%
Beta-Adjusted Premium
0%
Security Market Line
CAPM is a simplified model of risk and return with well-known limitations (it assumes a single risk factor, market efficiency, and a stable beta). It's a standard starting point in corporate finance, not a guaranteed predictor of actual returns.