Cost of Equity Calculator
Calculate cost of equity using CAPM, Dividend Discount Model, and Bond Yield plus Risk Premium methods.
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
11.20%Rf + Beta × (Rm - Rf)
DDM (Gordon Growth)
9.00%D1/P0 + g
Bond Yield + RP
9.00%Rf + Risk Premium
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%