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​ = 3.5%β = 1rm​ = 10.5%β = 1.8re​ = ?

The risk-free rate is 3.5%, the expected market return is 10.5% and a share has a beta of 1.8. Use CAPM to find the required return on the share re.

rf = 3.5%rm = 10.5%β = 1.8
re = %
2.Easy
βr (%)SMLrf​ = 2%β = 1rm​ = 6.5%β = 0.6re​ = ?

The risk-free rate is 2%, the expected market return is 6.5% and a share has a beta of 0.6. Use CAPM to find the required return on the share re.

rf = 2%rm = 6.5%β = 0.6
re = %
3.Medium
WACC = ?equityEre​ = 8%debtD = 0.5·Erd​ = 3%T = 20%

A company has a debt-to-equity ratio (at market values) of 0.5. Its cost of equity is 8%, its pre-tax cost of debt is 3% and the tax rate is 20%. Find the WACC.

D/E = 0.5re = 8%rd = 3%T = 20%
WACC = %
4.Medium
WACC = ?equity€4 000 000re​ = 11%debt€6 000 000rd​ = 4%T = 30%

A company has equity worth €4 000 000 and debt worth €6 000 000. Its cost of equity is 11%, its pre-tax cost of debt is 4% and the tax rate is 30%. Find the WACC.

E = €4 000 000D = €6 000 000re = 11%rd = 4%T = 30%
WACC = %
5.Hard
WACC = ?equity2 500 000 × €22.00β = 0.9rf​ = 2.5%, rm​ = 9.5%debt20 000 × €1 050rd​ = 5%T = 28%

A company has 2 500 000 shares at €22.00 each and 20 000 bonds trading at €1 050 each. The pre-tax cost of debt is 5% and the tax rate is 28%. 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 = 5%T = 28%
WACC = %
6.Hard
WACC = ?equity€6 000 000re​ = 11%bonds8 000 × €1 143coupon 4%, n = 11T = 25.8%

A company has equity with a market value of €6 000 000 and a cost of equity of 11%. Its debt consists of 8 000 bonds (face value €1 000, annual coupon 4%, 11 years to maturity) that trade at €1 143 each. The tax rate is 25.8%. Find the WACC, using the yield to maturity of the bonds as the pre-tax cost of debt.

E = €6 000 000re = 11%bonds: 8 000 × €1 143coupon = 4%n = 11T = 25.8%
WACC = %

Answer key

  1. 1. re = 16.1 %
  2. 2. re = 4.7 %
  3. 3. WACC = 6.133 %
  4. 4. WACC = 6.08 %
  5. 5. WACC = 7.363 %
  6. 6. WACC = 5.477 %

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