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
βr (%)SMLrf​ = 2.5%β = 1rm​ = 9%β = 0.9re​ = ?

The risk-free rate is 2.5%, the expected market return is 9% and a share has a beta of 0.9. Use CAPM to find the required return on the share re.

rf = 2.5%rm = 9%β = 0.9
re = %
2.Easy
Dloans€10 000 000I = €350 000tax savingT = 21%interest after tax?rd​·(1 − T) = ?

A company has loans of €10 000 000 on which it pays €350 000 interest per year. The tax rate is 21%. Find the after-tax cost of debt rd·(1 − T) in percent.

D = €10 000 000I = €350 000T = 21%
rd·(1 − T) = %
3.Medium
WACC = ?equity€3 000 000re​ = 14%debt€4 000 000rd​ = 4.5%T = 30%

A company has equity worth €3 000 000 and debt worth €4 000 000. Its cost of equity is 14%, its pre-tax cost of debt is 4.5% and the tax rate is 30%. Find the WACC.

E = €3 000 000D = €4 000 000re = 14%rd = 4.5%T = 30%
WACC = %
4.Medium
WACC = ?equity€6 000 000re​ = 11%debt€4 000 000rd​ = 3.5%T = 30%

A company has equity worth €6 000 000 and debt worth €4 000 000. Its cost of equity is 11%, its pre-tax cost of debt is 3.5% and the tax rate is 30%. Find the WACC.

E = €6 000 000D = €4 000 000re = 11%rd = 3.5%T = 30%
WACC = %
5.Hard
WACC = ?equity2 500 000 × €14.50β = 1.1rf​ = 2%, rm​ = 6%debt40 000 × €1 020rd​ = 3%T = 21%

A company has 2 500 000 shares at €14.50 each and 40 000 bonds trading at €1 020 each. The pre-tax cost of debt is 3% and the tax rate is 21%. The share’s beta is 1.1, the risk-free rate 2% and the market return 6%. Find the WACC.

β = 1.1rf = 2%rm = 6%rd = 3%T = 21%
WACC = %
6.Hard
WACC = ?equity1 000 000 × €59.50β = 1.8rf​ = 1.5%, rm​ = 7.5%debt40 000 × €960rd​ = 4%T = 25%

A company has 1 000 000 shares at €59.50 each and 40 000 bonds trading at €960 each. The pre-tax cost of debt is 4% and the tax rate is 25%. The share’s beta is 1.8, the risk-free rate 1.5% and the market return 7.5%. Find the WACC.

β = 1.8rf = 1.5%rm = 7.5%rd = 4%T = 25%
WACC = %

Answer key

  1. 1. re = 8.35 %
  2. 2. rd·(1 − T) = 2.765 %
  3. 3. WACC = 7.8 %
  4. 4. WACC = 7.58 %
  5. 5. WACC = 4.266 %
  6. 6. WACC = 8.652 %

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