CAPM Expected Return & Equity Risk Premium Calculator

Evaluate E(R_i) = R_f + β × (E(R_m) − R_f) and systematic risk premium.

CAPM Expected Cost of Equity
11.44 %
Market Equity Risk Premium (Rm − Rf) 5.75 %
Beta-Adjusted Risk Premium (β × ERP) 7.19 %
Risk-Free Rate Baseline 4.25 %
Inputs
Amounts are treated in the selected currency; no foreign-exchange conversion is applied.
% / yr
Risk-free government bond yield R_f (%).
% / yr
Expected broad market annual return E(R_m) (%).
β
Asset systematic volatility beta (β).
Results & Graph
CAPM Expected Cost of Equity
11.44 %
Market Equity Risk Premium (Rm − Rf)
5.75 %
Beta-Adjusted Risk Premium (β × ERP)
7.19 %
Risk-Free Rate Baseline
4.25 %

CAPM Expected Cost of Equity

Graph 1 • Risk Free Rate Pct Sensitivity Recalculates the domain equation across 50% to 150% of the primary input while holding other parameters constant.
0 % 6.5 % 12.9 % 50%: 11.97 % 12.0 50% 75%: 11.7 % 11.7 75% 100%: 11.44 % 11.4 100% 125%: 11.17 % 11.2 125% 150%: 10.91 % 10.9 150%
Graph 2 • Primary & Supporting Metric Comparison Compares the primary output alongside supporting domain benchmarks.
CAPM Expected Cost of Equity 11.44 % Market Equity Risk Premium (Rm − Rf) 5.75 % Beta-Adjusted Risk Premium (β × ERP) 7.19 % Risk-Free Rate Baseline 4.25 %
Graph 3 • Exact Output Table & Units Displays each calculated output in its exact domain unit.
CAPM Expected Cost of Equity11.44 %Market Equity Risk Premium (Rm − Rf)5.75 %Beta-Adjusted Risk Premium (β × ERP)7.19 %Risk-Free Rate Baseline4.25 %
Summary: With R_f = 4.25%, Equity Risk Premium = 5.75%, and β = 1.25, CAPM expected return is 11.44%.
Summary: With R_f = 4.25%, Equity Risk Premium = 5.75%, and β = 1.25, CAPM expected return is 11.44%.

Formula & Mathematical Methodology: CAPM & Beta Financial Formula

E(Ri) = Rf + β × [ E(Rm) − Rf ]
E(R_i) = R_f + β × [ E(R_m) − R_f ]
  • riskFreeRatePct: Risk Free Rate Pct (% / yr)
  • expectedMarketReturnPct: Expected Market Return Pct (% / yr)
  • stockBeta: Stock Beta (β)

Rounding: Internal compounding uses full floating-point precision; currency outputs round to 2 decimal places.

Worked Example: Financial Planning Example: CAPM & Beta

Evaluate E(R_i) = R_f + β × (E(R_m) − R_f) and systematic risk premium.

  1. Select your preferred display currency and enter your current financial figures.
  2. Evaluate the governing financial equation: E(R_i) = R_f + β × [ E(R_m) − R_f ].
  3. Review the primary result, supporting breakdown, and 3 interactive SVG charts.
Result: Evaluates CAPM & Beta using E(R_i) = R_f + β × [ E(R_m) − R_f ].

Frequently Asked Questions

How does the CAPM Expected Return & Equity Risk Premium Calculator compute its result?

It evaluates E(R_i) = R_f + β × [ E(R_m) − R_f ] using your entered parameters and updates all three custom financial charts in real time.

Does changing the currency convert exchange rates?

No. Selecting USD, INR, GBP, EUR, or any of the 150+ currencies formats all monetary amounts in your chosen denomination.

Are my financial numbers kept private?

Yes. All calculations run 100% locally in your browser with zero external server requests.

Finance & Investing • Valuation & Corporate Finance Guide

How to Use the CAPM Expected Return & Equity Risk Premium Calculator: Practical Guide & Visual Analysis

Calculate expected cost of equity E(R_i) using the Capital Asset Pricing Model (CAPM) from risk-free rate, stock beta β, and expected market return. Supports 150+ display currencies, textbook mathematical formulas, and three custom SVG financial visualizations. Whether you are researching capm expected return & equity risk premium calculator, capm & beta, capm expected equity return beta, valuation & corporate finance calculator, this interactive tool helps you calculate expected cost of equity E(R_i) using the Capital Asset Pricing Model (CAPM) from risk-free rate, stock beta β, and expected market return.

Interpreting the 3 Custom Visual Graphs & Key Outputs

As you adjust Display Currency, Risk Free Rate Pct, Expected Market Return Pct, Stock Beta, the calculator immediately computes Primary financial result, Supporting cash-flow & yield metrics, 3-Panel custom financial SVG charts and updates all three domain-specific SVG charts in real time. Instead of relying on a single static figure, you can inspect the primary domain diagram, component breakdown, and multi-point trajectory curve to see how changing your inputs shifts the final result. Use the Compare (up to 3 scenarios) button to evaluate side-by-side variations before making a decision.

Real-World Benchmark & Planning Tips (Global & India Financial Planning Reference)

In our benchmark scenario (Financial Planning Example: CAPM & Beta), Evaluates CAPM & Beta using E(R_i) = R_f + β × [ E(R_m) − R_f ]. Keep in mind that rates, yields, and tax percentages are treated as constant over the modeled horizon unless varied in scenario comparison. For related calculations in Finance & Investing, explore Compound Interest Calculator, Loan & EMI Calculator, SIP Calculator (Systematic Investment Plan).