The formula for CAPM calculates the expected ... to use since most beta calculations are based on the S&P 500. Example of CAPM Calculation We find that Tesla has a beta of 0.48.

The principal criticisms of the CAPM center around the ambiguity of the data that goes into the formula. Take the risk-free rate, for example. Over an analyst’s chosen investment time horizon ...

The CAPM formula is: Cost of Equity (CAPM) = Risk-Free Rate of Return + Beta × (Market Rate of Return – Risk-Free Rate of Return) For example, if the risk-free rate is 2%, the market return is ...