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.

Learn how to calculate the cost of equity in Microsoft Excel using the capital asset pricing model, or CAPM, including brief definitions of each component.

The primary drivers of WACC are the cost of equity and cost of debt. More details on how we calculate each of these is below: Cost of Equity Based on the capital asset pricing model (CAPM).