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.

New worksheetPractise online with hints

For teachers: free to print, copy and use in class. Every new worksheet has new values and its own answer key. A link to ExamProblems on your course page is appreciated.

Name: ____________________   Date: ____________

1.Easy
βr (%)SMLrf​ = 3%β = 1rm​ = 10%β = 0.8re​ = ?

The risk-free rate is 3%, the expected market return is 10% and a share has a beta of 0.8. Use CAPM to find the required return on the share re.

rf = 3%rm = 10%β = 0.8
re = %
2.Easy
βr (%)SMLrf​ = 1.5%β = 1rm​ = 8%β = 1.2re​ = ?

The risk-free rate is 1.5%, the expected market return is 8% and a share has a beta of 1.2. Use CAPM to find the required return on the share re.

rf = 1.5%rm = 8%β = 1.2
re = %
3.Medium
WACC = ?equity€5 000 000re​ = 14%debt€2 000 000rd​ = 3.5%T = 25.8%

A company has equity worth €5 000 000 and debt worth €2 000 000. Its cost of equity is 14%, its pre-tax cost of debt is 3.5% and the tax rate is 25.8%. Find the WACC.

E = €5 000 000D = €2 000 000re = 14%rd = 3.5%T = 25.8%
WACC = %
4.Medium
WACC = ?equity€10 000 000re​ = 10%debt€5 000 000rd​ = 4%T = 25%

A company has equity worth €10 000 000 and debt worth €5 000 000. Its cost of equity is 10%, its pre-tax cost of debt is 4% and the tax rate is 25%. Find the WACC.

E = €10 000 000D = €5 000 000re = 10%rd = 4%T = 25%
WACC = %
5.Hard
WACC = ?equity5 000 000 × €27.50β = 1.3rf​ = 4%, rm​ = 9%debt40 000 × €1 020rd​ = 4%T = 25%

A company has 5 000 000 shares at €27.50 each and 40 000 bonds trading at €1 020 each. The pre-tax cost of debt is 4% and the tax rate is 25%. The share’s beta is 1.3, the risk-free rate 4% and the market return 9%. Find the WACC.

β = 1.3rf = 4%rm = 9%rd = 4%T = 25%
WACC = %
6.Hard
WACC = ?equity5 000 000 × €19.50β = 0.9rf​ = 1.5%, rm​ = 6.5%debt20 000 × €1 020rd​ = 4%T = 30%

A company has 5 000 000 shares at €19.50 each and 20 000 bonds trading at €1 020 each. The pre-tax cost of debt is 4% and the tax rate is 30%. The share’s beta is 0.9, the risk-free rate 1.5% and the market return 6.5%. Find the WACC.

β = 0.9rf = 1.5%rm = 6.5%rd = 4%T = 30%
WACC = %

Answer key

  1. 1. re = 8.6 %
  2. 2. re = 9.3 %
  3. 3. WACC = 10.74 %
  4. 4. WACC = 7.667 %
  5. 5. WACC = 8.784 %
  6. 6. WACC = 5.446 %

Full step-by-step solutions: practise this topic on examproblems.com.