Cost Of Equity Calculator

You may know the return you expect, but do you know how much return your investors demand? The cost of equity capital calculator​ helps you figure that out in seconds. This smart tool shows you what it truly costs your business to raise money from shareholders. It is fast, simple, and accurate, so you always stay in control of your financial future.

Cost of equity is the return that investors expect to earn from your company in exchange for investing their money.

It is what you “pay” your shareholders, not in cash, but in value.

You don’t see it on your balance sheet, but it affects every decision you make. Whether you are launching a product, raising funds, or pricing your stock, your cost of equity shapes it all.

When you calculate cost of equity​ , it means you know how expensive it is to fund your business through shares instead of loans.

You can see the option to select yes or no for the question Does the company pay dividends? Now choose one according to your situation:

If you have selected yes, then:

1. Put in the amount of dividends per share that your business pays.
2. Decide on your company’s stock’s current market price.
3. Enter the anticipated rate of growth for your dividends.
4. Once all the information is in, click the “Calculate” button.

If the Company Does Not Pay Dividends:

1. Set the risk-free rate of return, which is typically the return on government bonds.
2. Enter the market rate of return (%), which is the average return expected from the overall stock market.
3. Choose the Beta of your stock, which measures its volatility compared to the market. 
4. Now click the “Calculate” button. 

1. Save Time While Staying Accurate

You no longer need to dig through textbooks or search online for complex formulas. This calculator handles everything behind the scenes and gives you instant, accurate results in one click. With our tool, you focus on decisions, not calculations.

2. Make Investor Conversations Easier

If you are raising funds or presenting to shareholders, this tool gives you the key number they care about: how much return they expect. You walk into any meeting ready, clear, and confident. This way, only the right numbers talk from your side..

3. See If Equity Funding Is Really Worth It

Raising money from investors sounds exciting, but it is not always cheap. This calculator helps you measure if issuing shares actually makes financial sense compared to other funding options. You avoid hidden costs and choose smarter paths.

4. Avoid Costly Missteps in Financial Planning

When you don’t know your cost of equity, you might underprice risk or overpromise returns. This calculator helps you align your plans with what the market really expects, so you don’t get blindsided later.

5. Works Seamlessly Across Projects and Industries

Whether you run a startup, manage a large business, or work on a one-time project, this calculating tool adjusts to your needs. You should use it across industries, across funding rounds, and get results that match your exact situation.

1. Shape Smarter Investment Proposals

Before pitching your business to investors, you must calculate your cost of equity. It helps you back up your growth plans with solid numbers and shows you have done your homework. You will establish trust by speaking their language in this manner.

2. Compare Debt vs Equity Like a Pro

Should you take a loan or raise more capital? The cost of equity investment is displayed in this calculator. So, use it to weigh your options side by side and go with the one that protects your profits.

3. Evaluate the Financial Health of a Business

Even if you are analyzing another company, for example, as an investor or a partner, you can use this equity calculator to check if they are offering fair returns or taking unnecessary risks. Our tool will always help you see beneath the surface.

4. Set Performance Benchmarks with Clarity

Once you know the cost of equity, you can set clear return targets for your team or project. You can stop guessing what “success” looks like and start setting goals that actually align with what investors expect.

5. Make Better Stock Pricing Choices

If you are deciding how to price shares or whether to offer dividends, this tool gives you the base rate you must beat. It helps you stay competitive while still satisfying shareholder expectations.