Cost of Equity Calculator

Calculate cost of equity using CAPM, Dividend Discount Model, and Bond Yield plus Risk Premium methods.

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Important Financial Disclaimer

This calculator provides estimates based on standard financial formulas from verified references. Results are for informational and educational purposes only and should not be considered as professional financial, investment, or tax advice.

For important financial decisions such as loans, investments, mortgages, retirement planning, or tax matters, please consult with qualified financial advisors, certified financial planners, or licensed tax professionals who can review your specific situation.

Calculations may not account for all variables specific to your circumstances, local regulations, or current market conditions. Always verify results and consult professionals before making financial commitments.

Not a substitute for professional financial advice

Calculation Method

CAPM Inputs

%
%

DDM Inputs

$
$
%

Risk Premium Method

%

Cost of Equity

11.20%

Moderate - Average risk

Market Premium
6.00%
Beta
1.20

All Methods Comparison

CAPM

Rf + Beta × (Rm - Rf)

11.20%
DDM (Gordon Growth)

D1/P0 + g

9.00%
Bond Yield + RP

Rf + Risk Premium

9.00%
Average9.73%

CAPM Breakdown

Risk-Free Rate (Rf)4.00%
Beta (β)1.20
Market Premium (Rm - Rf)6.00%
Beta × Premium7.20%

CAPM Formula: Re = Rf + β × (Rm - Rf) = 4.0% + 1.20 × 6.0% = 11.20%

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