CAPM Calculator

About this calculator

This calculator finds an asset's expected return using the Capital Asset Pricing Model (CAPM): Ra = Rf + β×(Rm − Rf), where Rf is the risk-free rate, β (beta) measures the asset's volatility relative to the market, and Rm is the expected market return, so Rm − Rf is the market risk premium.

Corporate finance analysts use CAPM to estimate the cost of equity for a discount rate in valuation models, and investors use it to judge whether a stock's expected return compensates fairly for its systematic (market) risk. Enter the risk-free rate, the asset's beta, and the expected market return to get the expected return.