Cost of Equity (Ke) Calculator
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Cost of Equity (Ke) —
Notes
- Formula:
Ke = Rf + (β × ERP) - Rf (Risk-Free Rate): Theoretical rate of return of an investment with zero risk. Usually the yield on a 10-year US Treasury bond.
- β (Beta): A measure of a stock's volatility in relation to the overall market.
- ERP (Equity Risk Premium): The extra return that's available to equity investors above the risk-free rate.
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