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

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%