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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1.Easy
βr (%)SMLrf​ = 2.5%β = 1rm​ = 8%β = 1.1re​ = ?

The risk-free rate is 2.5%, the expected market return is 8% and a share has a beta of 1.1. Use CAPM to find the required return on the share re.

rf = 2.5%rm = 8%β = 1.1
re = %
2.Easy
βr (%)SMLrf​ = 1.5%β = 1rm​ = 8.5%β = 0.8re​ = ?

The risk-free rate is 1.5%, the expected market return is 8.5% and a share has a beta of 0.8. Use CAPM to find the required return on the share re.

rf = 1.5%rm = 8.5%β = 0.8
re = %
3.Medium
WACC = 8.06%equity€3 000 000re​ = ?debt€1 000 000rd​ = 3%T = 25%

A company has equity worth €3 000 000 and debt worth €1 000 000. Its WACC is 8.06%, its pre-tax cost of debt is 3% and the tax rate is 25%. Find the cost of equity re.

E = €3 000 000D = €1 000 000WACC = 8.06%rd = 3%T = 25%
re = %
4.Medium
WACC = ?equity€4 000 000re​ = 14%debt€5 000 000rd​ = 4.5%T = 30%

A company has equity worth €4 000 000 and debt worth €5 000 000. 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 = €4 000 000D = €5 000 000re = 14%rd = 4.5%T = 30%
WACC = %
5.Hard
WACC = ?equity5 000 000 × €52.00D0​ = €2.50g = 2%debt€208 000 000rd​ = 4%T = 25%

A company has 5 000 000 shares trading at €52.00; the book value of its equity is €104 000 000. It just paid a dividend of €2.50 per share, and dividends grow by 2% per year. Its debt has a market value of €208 000 000 and a pre-tax cost of 4%. The tax rate is 25%. Find the WACC, using the dividend growth model for the cost of equity.

N = 5 000 000P0 = €52.00book equity = €104 000 000D0 = €2.50g = 2%D = €208 000 000rd = 4%T = 25%
WACC = %
6.Hard
WACC = ?equity5 000 000 × €41.00β = 0.9rf​ = 2.5%, rm​ = 9.5%debt40 000 × €980rd​ = 4.5%T = 25.8%

A company has 5 000 000 shares at €41.00 each and 40 000 bonds trading at €980 each. The pre-tax cost of debt is 4.5% and the tax rate is 25.8%. The share’s beta is 0.9, the risk-free rate 2.5% and the market return 9.5%. Find the WACC.

β = 0.9rf = 2.5%rm = 9.5%rd = 4.5%T = 25.8%
WACC = %

Answer key

  1. 1. re = 8.55 %
  2. 2. re = 7.1 %
  3. 3. re = 9.997 %
  4. 4. WACC = 7.972 %
  5. 5. WACC = 5.169 %
  6. 6. WACC = 7.923 %

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