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
Dloans€5 000 000I = €200 000tax savingT = 28%interest after tax?rd​·(1 − T) = ?

A company has loans of €5 000 000 on which it pays €200 000 interest per year. The tax rate is 28%. Find the after-tax cost of debt rd·(1 − T) in percent.

D = €5 000 000I = €200 000T = 28%
rd·(1 − T) = %
2.Easy
years0123…9P0​ = €17.50D1​D2​D3​…D0​ = €0.50, g = 6%, re​ = ?

A company has just paid a dividend of €0.50 per share. Dividends are expected to grow by 6% per year forever, and the share price is €17.50. Use the dividend growth model to find the cost of equity re.

D0 = €0.50g = 6%P0 = €17.50
re = %
3.Medium
WACC = ?equity€10 000 000re​ = 14%debt€4 000 000rd​ = 5%T = 25%

A company has equity worth €10 000 000 and debt worth €4 000 000. Its cost of equity is 14%, its pre-tax cost of debt is 5% and the tax rate is 25%. Find the WACC.

E = €10 000 000D = €4 000 000re = 14%rd = 5%T = 25%
WACC = %
4.Medium
WACC = ?equity€4 000 000re​ = 11%debt€2 000 000rd​ = 6%T = 25%

A company has equity worth €4 000 000 and debt worth €2 000 000. Its cost of equity is 11%, its pre-tax cost of debt is 6% and the tax rate is 25%. Find the WACC.

E = €4 000 000D = €2 000 000re = 11%rd = 6%T = 25%
WACC = %
5.Hard
WACC = ?equity1 000 000 × €11.50β = 1.2rf​ = 3.5%, rm​ = 9.5%debt5 000 × €1 050rd​ = 7%T = 21%

A company has 1 000 000 shares at €11.50 each and 5 000 bonds trading at €1 050 each. The pre-tax cost of debt is 7% and the tax rate is 21%. The share’s beta is 1.2, the risk-free rate 3.5% and the market return 9.5%. Find the WACC.

β = 1.2rf = 3.5%rm = 9.5%rd = 7%T = 21%
WACC = %
6.Hard
WACC = ?equity5 000 000 × €44.50β = 0.6rf​ = 4%, rm​ = 8%debt40 000 × €1 050rd​ = 6%T = 25.8%

A company has 5 000 000 shares at €44.50 each and 40 000 bonds trading at €1 050 each. The pre-tax cost of debt is 6% and the tax rate is 25.8%. The share’s beta is 0.6, the risk-free rate 4% and the market return 8%. Find the WACC.

β = 0.6rf = 4%rm = 8%rd = 6%T = 25.8%
WACC = %

Answer key

  1. 1. rd·(1 − T) = 2.88 %
  2. 2. re = 9.029 %
  3. 3. WACC = 11.07 %
  4. 4. WACC = 8.833 %
  5. 5. WACC = 9.08 %
  6. 6. WACC = 6.091 %

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