I Capital Asset Pricing Model (CAPM) is a financial analysis tool that assists investors to measure the expected rate of return on investment carried out on its risk level.
Instructions: Use this calculator to find out the CAPM (Capital Asset Pricing Model) of a company. Please input the Risk-free rate (%), Expected return of the market (%), and Beta for Stock in the form below:
CAPM = Risk-free Rate + β x (Market Return – Risk-free Rate)
Risk-free Rate = A rate of return on government risk-free investment
Market Return = An expected rate of return based on market
Beta or β = Market risk sensitivity
Must read: A complete guide on how to calculate CAPM in excel