The capital asset pricing model (CAPM) can help you evaluate a stock's potential for reward within the context of its inherent risk.

The CAPM formula requires only the following three pieces of information: the rate of return for the general market, the beta value of the stock in question, and the risk-free rate.

The cost of equity formula is a financial metric that represents the return investors expect for holding a company's stock. This formula can help you evaluate whether a company's stock is ...

The CAPM formula says that the 11.71% returns of the market are actually a risk-free return of 3.67% plus a premium of 8.04% that investors require to take the risks in an inherently volatile ...

The Certified Associate in Project Management (CAPM)® certification is a globally recognized, entry-level credential accepted across many industries. This professional designation is ideal for ...

· CAPM formula is additional in terms of what you could earn elsewhere while APT formula is more precise to that stock because; APT does not apply the whole market's return whereas, CAPM concern ...

The CAPM® and PMI® are both credentials offered through the Project Management Institute (PMI)®. Read more to understand the key differences.

One simple but powerful method investors can use to assess the risk and reward of a stock portfolio is using the Capital Asset Pricing Model, or CAPM, model for expected returns.

In sum, the CAPM formula takes into account an investor’s willingness to take on additional risk, given the state of interest rates and the expected return of alternative investments.

Learn about the components of the capital asset pricing model (CAPM), and discover how to calculate a company's cost of equity financing with this formula.