Cost of Equity Calculator
Cost of Equity: 9.10%
Formula: Risk-Free Rate + Beta × (Market Return - Risk-Free Rate)
Our Cost of Equity Calculator is an essential financial tool for investors and corporate finance professionals, implementing the Capital Asset Pricing Model (CAPM) to determine the expected return shareholders require for investing in a company. This web-based calculator provides instant, accurate computations with a clean interface optimized for both desktop and mobile use.
What Is This Calculator?
The calculator measures a company’s cost of equity - a critical component in investment decisions, valuation models, and capital budgeting. Using the CAPM methodology (Risk-Free Rate + Beta × Market Risk Premium), it helps users assess the compensation investors demand for bearing systematic risk, supporting smarter financial planning and analysis.
How To Use:
- Input the current risk-free rate (typically government bond yields)
- Enter the stock’s beta coefficient (volatility measure)
- Provide the expected market return
- View instantly calculated cost of equity percentage
- Results update automatically with each input change
Perfect for financial analysts, MBA students, and investment professionals, this tool simplifies complex calculations while maintaining academic rigor. The responsive design ensures seamless use across all devices.