# How to Calculate Capm?

In order to calculate the CAPM, or capital asses pricing model, for a company all you need is a few key figures. Once you have those figures you are able to put those into an equation to come out with your CAPM. Click here for more info www.moneyinstructor.com
Reference:
How to Calculate CAPM
Calculate CAPM, or capital asset pricing model, by taking the risk-free rate of a security and multiplying it by the risk premium. Figure out the average risk for a security by using the CAPM with information from a certified public accountant in this... More »
Difficulty: Moderate
Source: www.ehow.com
Calculating CAPM should give you the theoretical 'correct' value of a security. This value is not necessarily reflected in the Bid/Ask pricing, but will give you an idea on whether the stock is overvalued and thus positioned for a 'correction' or if its undervalued and positioned for bull run.
Q&A Related to "How to Calculate Capm"
 Video Transcript. My name is Miranda Chook, a CPA. The capital asset pricing model depicts the, the concept of investment risk of a security with the expected return of that security http://www.ehow.com/video_4872536_calculate-capm.h...
 1. Open Microsoft Excel. 2. Enter the alternative "risk free" investment in cell A1. This could be a savings account, government bond or other guaranteed investment. As http://www.ehow.com/how_8696905_calculate-capm-exc...
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 1. Determine the market risk premium. The market risk premium equals the expected return minus the risk-free rate. The risk-free rate of return is usually the United States three-month http://www.ehow.com/how_6545663_calculate-cost-equ...
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