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
years0123…9Pp​ = €33€8.00€8.00€8.00…rp​ = ?

A company's preferred shares pay a fixed dividend of €8.00 per year and trade at €33. The tax rate is 21%. Find the cost of preferred stock rp.

Dp = €8.00Pp = €33T = 21%
rp = %
2.Easy
years0123…9Pp​ = €37€7.50€7.50€7.50…rp​ = ?

A company's preferred shares pay a fixed dividend of €7.50 per year and trade at €37. The tax rate is 30%. Find the cost of preferred stock rp.

Dp = €7.50Pp = €37T = 30%
rp = %
3.Medium
WACC = ?equity€12 000 000re​ = 11%debt€2 000 000rd​ = 7%T = 20%

A company has equity worth €12 000 000 and debt worth €2 000 000. Its cost of equity is 11%, its pre-tax cost of debt is 7% and the tax rate is 20%. Find the WACC.

E = €12 000 000D = €2 000 000re = 11%rd = 7%T = 20%
WACC = %
4.Medium
WACC = ?ordinary shares€5 000 000re​ = 13%preferred shares€1 500 000rp​ = 8%debt€3 000 000rd​ = 3%T = 21%

A company is financed with ordinary shares worth €5 000 000, preferred shares worth €1 500 000 and debt worth €3 000 000. The cost of equity is 13%, the cost of preferred stock 8% and the pre-tax cost of debt 3%. The tax rate is 21%. Find the WACC.

E = €5 000 000Ps = €1 500 000D = €3 000 000re = 13%rp = 8%rd = 3%T = 21%
WACC = %
5.Hard
WACC = ?equity2 500 000 × €33.50β = 0.6rf​ = 3%, rm​ = 7%debt40 000 × €1 000rd​ = 5%T = 28%

A company has 2 500 000 shares at €33.50 each and 40 000 bonds trading at €1 000 each. The pre-tax cost of debt is 5% and the tax rate is 28%. The share’s beta is 0.6, the risk-free rate 3% and the market return 7%. Find the WACC.

β = 0.6rf = 3%rm = 7%rd = 5%T = 28%
WACC = %
6.Hard
WACC = ?equity€15 000 000re​ = 14%bonds5 000 × €925coupon 7%, n = 12T = 21%

A company has equity with a market value of €15 000 000 and a cost of equity of 14%. Its debt consists of 5 000 bonds (face value €1 000, annual coupon 7%, 12 years to maturity) that trade at €925 each. The tax rate is 21%. Find the WACC, using the yield to maturity of the bonds as the pre-tax cost of debt.

E = €15 000 000re = 14%bonds: 5 000 × €925coupon = 7%n = 12T = 21%
WACC = %

Answer key

  1. 1. rp = 24.24 %
  2. 2. rp = 20.27 %
  3. 3. WACC = 10.23 %
  4. 4. WACC = 8.854 %
  5. 5. WACC = 4.818 %
  6. 6. WACC = 12.19 %

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