Beta, represented by the Greek lowercase letter β, is also used in the formula for the weighted average cost of capital, which calculates a company’s cost of capital. This article, though ...

Reviewed by Thomas Brock Fact checked by Suzanne Kvilhaug CAPM: An Overview Many investors use the capital asset pricing model (CAPM) as a way to estimate the potential return of a stock or other ...

It turns out you can – at least theoretically – thanks to a statistical measurement known as beta. Profit and prosper with the best of expert advice on investing, taxes, retirement ...

The CAPM formula is: Cost of Equity (CAPM) = Risk-Free Rate of Return + Beta × (Market Rate of Return – Risk-Free Rate of Return) For example, if the risk-free rate is 2%, the market return is ...

Learn more about the weighted average cost of capital and see why firms unlever and re-lever beta to compare debt and equity ...