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​ = 6.5%β = 1.5re​ = ?

The risk-free rate is 2.5%, the expected market return is 6.5% and a share has a beta of 1.5. Use CAPM to find the required return on the share re.

rf = 2.5%rm = 6.5%β = 1.5
re = %
2.Easy
βr (%)SMLrf​ = 2.5%β = 1rm​ = 6.5%β = 1.2re​ = ?

The risk-free rate is 2.5%, the expected market return is 6.5% and a share has a beta of 1.2. Use CAPM to find the required return on the share re.

rf = 2.5%rm = 6.5%β = 1.2
re = %
3.Medium
WACC = ?equity€3 000 000re​ = 10%debt€2 000 000rd​ = 3.5%T = 21%

A company has equity worth €3 000 000 and debt worth €2 000 000. Its cost of equity is 10%, its pre-tax cost of debt is 3.5% and the tax rate is 21%. Find the WACC.

E = €3 000 000D = €2 000 000re = 10%rd = 3.5%T = 21%
WACC = %
4.Medium
WACC = ?equityEre​ = 13%debtD = 0.6·Erd​ = 4.5%T = 20%

A company has a debt-to-equity ratio (at market values) of 0.6. Its cost of equity is 13%, its pre-tax cost of debt is 4.5% and the tax rate is 20%. Find the WACC.

D/E = 0.6re = 13%rd = 4.5%T = 20%
WACC = %
5.Hard
WACC = ?equity2 500 000 × €10.50β = 1.3rf​ = 3%, rm​ = 7%debt20 000 × €980rd​ = 3%T = 28%

A company has 2 500 000 shares at €10.50 each and 20 000 bonds trading at €980 each. The pre-tax cost of debt is 3% and the tax rate is 28%. The share’s beta is 1.3, the risk-free rate 3% and the market return 7%. Find the WACC.

β = 1.3rf = 3%rm = 7%rd = 3%T = 28%
WACC = %
6.Hard
WACC = ?equity€15 000 000re​ = 11%bonds2 000 × €1 083coupon 6%, n = 11T = 28%

A company has equity with a market value of €15 000 000 and a cost of equity of 11%. Its debt consists of 2 000 bonds (face value €1 000, annual coupon 6%, 11 years to maturity) that trade at €1 083 each. The tax rate is 28%. Find the WACC, using the yield to maturity of the bonds as the pre-tax cost of debt.

E = €15 000 000re = 11%bonds: 2 000 × €1 083coupon = 6%n = 11T = 28%
WACC = %

Answer key

  1. 1. re = 8.5 %
  2. 2. re = 7.3 %
  3. 3. WACC = 7.106 %
  4. 4. WACC = 9.475 %
  5. 5. WACC = 5.618 %
  6. 6. WACC = 10.07 %

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