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
years0123…9P0​ = €41.00D1​D2​D3​…D0​ = €2.70, g = 6%, re​ = ?

A company has just paid a dividend of €2.70 per share. Dividends are expected to grow by 6% per year forever, and the share price is €41.00. Use the dividend growth model to find the cost of equity re.

D0 = €2.70g = 6%P0 = €41.00
re = %
2.Easy
years0123…9P0​ = €55.50D1​D2​D3​…D0​ = €3.70, g = 5%, re​ = ?

A company has just paid a dividend of €3.70 per share. Dividends are expected to grow by 5% per year forever, and the share price is €55.50. Use the dividend growth model to find the cost of equity re.

D0 = €3.70g = 5%P0 = €55.50
re = %
3.Medium
WACC = ?equity€5 000 000re​ = 9%debt€5 000 000rd​ = 5%T = 25%

A company has equity worth €5 000 000 and debt worth €5 000 000. Its cost of equity is 9%, its pre-tax cost of debt is 5% and the tax rate is 25%. Find the WACC.

E = €5 000 000D = €5 000 000re = 9%rd = 5%T = 25%
WACC = %
4.Medium
WACC = ?ordinary shares€10 000 000re​ = 13%preferred shares€1 000 000rp​ = 8%debt€3 000 000rd​ = 4.5%T = 25.8%

A company is financed with ordinary shares worth €10 000 000, preferred shares worth €1 000 000 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 4.5%. The tax rate is 25.8%. Find the WACC.

E = €10 000 000Ps = €1 000 000D = €3 000 000re = 13%rp = 8%rd = 4.5%T = 25.8%
WACC = %
5.Hard
WACC = ?equity5 000 000 × €16.00β = 1.8rf​ = 1%, rm​ = 7%debt20 000 × €1 000rd​ = 3%T = 30%

A company has 5 000 000 shares at €16.00 each and 20 000 bonds trading at €1 000 each. The pre-tax cost of debt is 3% and the tax rate is 30%. The share’s beta is 1.8, the risk-free rate 1% and the market return 7%. Find the WACC.

β = 1.8rf = 1%rm = 7%rd = 3%T = 30%
WACC = %
6.Hard
WACC = ?equity5 000 000 × €43.50β = 0.8rf​ = 3%, rm​ = 7%debt40 000 × €960rd​ = 4%T = 25.8%

A company has 5 000 000 shares at €43.50 each and 40 000 bonds trading at €960 each. The pre-tax cost of debt is 4% and the tax rate is 25.8%. The share’s beta is 0.8, the risk-free rate 3% and the market return 7%. Find the WACC.

β = 0.8rf = 3%rm = 7%rd = 4%T = 25.8%
WACC = %

Answer key

  1. 1. re = 12.98 %
  2. 2. re = 12 %
  3. 3. WACC = 6.375 %
  4. 4. WACC = 10.57 %
  5. 5. WACC = 9.86 %
  6. 6. WACC = 5.715 %

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