CAPM & WACC worksheet with answers

Free printable CAPM & WACC worksheet: 6 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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Name: ____________________   Date: ____________

1.Easy
Dloans€8 000 000I = €480 000tax savingT = 28%interest after tax?rd​·(1 − T) = ?

A company has loans of €8 000 000 on which it pays €480 000 interest per year. The tax rate is 28%. Find the after-tax cost of debt rd·(1 − T) in percent.

D = €8 000 000I = €480 000T = 28%
rd·(1 − T) = %
2.Easy
Dloans€5 000 000I = €250 000tax savingT = 28%interest after tax?rd​·(1 − T) = ?

A company has loans of €5 000 000 on which it pays €250 000 interest per year. The tax rate is 28%. Find the after-tax cost of debt rd·(1 − T) in percent.

D = €5 000 000I = €250 000T = 28%
rd·(1 − T) = %
3.Medium
WACC = 5%equity€3 000 000re​ = ?debt€5 000 000rd​ = 4%T = 20%

A company has equity worth €3 000 000 and debt worth €5 000 000. Its WACC is 5%, its pre-tax cost of debt is 4% and the tax rate is 20%. Find the cost of equity re.

E = €3 000 000D = €5 000 000WACC = 5%rd = 4%T = 20%
re = %
4.Medium
βr (%)SMLrf​ = 1.5%β = 1rm​ = ?β = 0.9re​ = 6%

A share with a beta of 0.9 has a required return of 6%. The risk-free rate is 1.5%. What expected market return rm does CAPM imply?

β = 0.9re = 6%rf = 1.5%
rm = %
5.Hard
WACC = ?equity1 000 000 × €12.00β = 1.8rf​ = 2%, rm​ = 6.5%debt20 000 × €1 000rd​ = 6%T = 25.8%

A company has 1 000 000 shares at €12.00 each and 20 000 bonds trading at €1 000 each. The pre-tax cost of debt is 6% and the tax rate is 25.8%. The share’s beta is 1.8, the risk-free rate 2% and the market return 6.5%. Find the WACC.

β = 1.8rf = 2%rm = 6.5%rd = 6%T = 25.8%
WACC = %
6.Hard
WACC = ?equity5 000 000 × €55.00β = 1.5rf​ = 1%, rm​ = 5%debt10 000 × €1 050rd​ = 6%T = 25.8%

A company has 5 000 000 shares at €55.00 each and 10 000 bonds trading at €1 050 each. The pre-tax cost of debt is 6% and the tax rate is 25.8%. The share’s beta is 1.5, the risk-free rate 1% and the market return 5%. Find the WACC.

β = 1.5rf = 1%rm = 5%rd = 6%T = 25.8%
WACC = %

Answer key

  1. 1. rd·(1 − T) = 4.32 %
  2. 2. rd·(1 − T) = 3.6 %
  3. 3. re = 8 %
  4. 4. rm = 6.5 %
  5. 5. WACC = 6.57 %
  6. 6. WACC = 6.906 %

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