Calculator · Cost of capital
Cost of equity calculator
Build a US-dollar cost of equity with CAPM, country risk premiums weighted by where the business operates and a bottom-up beta, then convert it to local currency using expected inflation.
How the cost of equity is built
The calculator starts from the risk-free rate and the mature-market equity risk premium of the chosen Damodaran data update, adds country risk premiums weighted by revenue (or by your own exposure measure, lambda), and multiplies the equity premium by a bottom-up beta relevered at your target debt-to-equity ratio and marginal tax rate. An additional premium for size or company-specific risk can be entered and is recorded with its justification.
The US-dollar result is converted to local currency with the differential-inflation formula, and a local build-up from a local government bond yield can be shown beside it as a cross-check. Defaults come from Damodaran Online and the OECD Corporate Tax Statistics database, and every input is listed with its source and date in the input register.
Related: Bottom-up beta calculator · WACC calculator · Damodaran data guide · Model notes
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