MasterTool

CAPM Calculator

Calculate capm from your own entered figures.

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Currency: Amounts are calculated in the currency you select; this site does not convert between currencies and does not use live exchange rates.

What this tool does

Calculate capm from your own entered figures. CAPM is a single-factor model: beta is assumed stable and the market return is your estimate, so the output is only as good as those inputs.

How to use the CAPM Calculator

  1. Enter or select risk-free rate (%).
  2. Enter or select beta.
  3. Enter or select expected market return (%).
  4. Read the calculated result; change any measurement to compare alternatives.

Formula

CAPM expected return E(R) = Rf + β × (Rm − Rf)
rf
Risk-free rate (%)
beta
Beta
rm
Expected market return (%)

CAPM is a single-factor model: beta is assumed stable and the market return is your estimate, so the output is only as good as those inputs.

Worked example

For capm calculator, the following measurements illustrate the exact method: Risk-free rate (%): 4; Beta: 1.2; Expected market return (%): 10.

Inputs

  • Risk-free rate (%)4
  • Beta1.2
  • Expected market return (%)10

Result

  • Expected return (CAPM)11.2%
  • Market risk premium (Rm − Rf)6%
  • Stock risk premium β × (Rm − Rf)7.2%

Results explained

Expected return (CAPM)
Expected return (CAPM) from the formula above. CAPM is a single-factor model: beta is assumed stable and the market return is your estimate, so the output is only as good as those inputs.
Market risk premium (Rm − Rf)
Market risk premium (Rm − Rf) from the formula above. CAPM is a single-factor model: beta is assumed stable and the market return is your estimate, so the output is only as good as those inputs.
Stock risk premium β × (Rm − Rf)
Stock risk premium β × (Rm − Rf) from the formula above. CAPM is a single-factor model: beta is assumed stable and the market return is your estimate, so the output is only as good as those inputs.

Frequently asked questions

CAPM expected return E(R) = Rf + β × (Rm − Rf)

CAPM is a single-factor model: beta is assumed stable and the market return is your estimate, so the output is only as good as those inputs.

No. All numbers are entered by you or come from the dated reference table shown on this page; calculations run locally.

This is an estimate, not financial, tax or legal advice. Verify the inputs and output with official sources and a qualified professional.

Check period consistency, currency, percentage inputs and the assumptions: CAPM is a single-factor model: beta is assumed stable and the market return is your estimate, so the output is only as good as those inputs.