# Capital Asset Pricing Model(CAPM) Calculator

This small business tool is used to derive the cost of equity using the risk-free rate of return using the CAPM model.

# Results...

# Results...

## How to calculate CAPM :

It is the relationship between the expected return and risk of investing in a security.The below formula is used to determines the expected return of a particular asset or investment.

__CAPM Formula__ :

E(R_{i}) = R_{f} + [ E(R_{m}) - R_{f} ] × β_{i}

Where,

E(R_{i}) - the expected return on the capital asset

R_{f} - the risk-free rate

E(R_{m}) - the expected return of the market

β_{i} - the beta of the security i

__Risk Free Rate of Return Formula__ :

Risk-free rate of return is an investment with zero risks.The risk-free rate is generally used is the United States 10 year government bond.

Risk Free Rate of Return =

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