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CAPM Calculator
Find an asset's expected return from its beta, the risk-free rate, and the market return.
How CAPM Works
The CAPM Formula
Rₑ is the expected return (cost of equity), R_f the risk-free rate, β the asset’s beta, and R_m the expected market return. The bracket (R_m − R_f) is the equity risk premium.
Systematic vs Specific Risk
CAPM only prices systematic (market-wide) risk, because asset-specific risk can be diversified away by holding many assets. So two stocks with the same beta should command the same expected return, regardless of their individual volatility.
From CAPM to a Valuation
Cost of Equity → WACC
The CAPM expected return is the cost of equity. Blend it with the after-tax cost of debt in the WACC calculator to get a company’s overall cost of capital.
WACC → Intrinsic Value
That WACC becomes the discount rate in a DCF valuation. So a small change in beta ripples all the way through to a company’s estimated intrinsic value.
Want deeper insights?
ARIA estimates beta, expected return, and risk across your whole portfolio — turning single-asset models like CAPM into a portfolio-level view of risk and return.
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