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​ = 1.5%β = 1rm​ = 8.5%β = ?re​ = 5.7%

Investors require a return of 5.7% on a share. The risk-free rate is 1.5% and the expected market return is 8.5%. Use CAPM to find the beta β of the share.

re = 5.7%rf = 1.5%rm = 8.5%
β =
2.Easy
βr (%)SMLrf​ = 1.5%β = 1rm​ = 7.5%β = 0.9re​ = ?

The risk-free rate is 1.5%, the expected market return is 7.5% and a share has a beta of 0.9. Use CAPM to find the required return on the share re.

rf = 1.5%rm = 7.5%β = 0.9
re = %
3.Medium
WACC = ?equity€5 000 000re​ = 10%debt€2 000 000rd​ = 3.5%T = 30%

A company has equity worth €5 000 000 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 30%. Find the WACC.

E = €5 000 000D = €2 000 000re = 10%rd = 3.5%T = 30%
WACC = %
4.Medium
WACC = ?equity€10 000 000re​ = 14%debt€1 000 000rd​ = 7%T = 30%

A company has equity worth €10 000 000 and debt worth €1 000 000. Its cost of equity is 14%, its pre-tax cost of debt is 7% and the tax rate is 30%. Find the WACC.

E = €10 000 000D = €1 000 000re = 14%rd = 7%T = 30%
WACC = %
5.Hard
WACC = ?equity2 500 000 × €28.00β = 1.1rf​ = 3%, rm​ = 7%debt20 000 × €1 020rd​ = 5%T = 28%

A company has 2 500 000 shares at €28.00 each and 20 000 bonds trading at €1 020 each. The pre-tax cost of debt is 5% and the tax rate is 28%. The share’s beta is 1.1, the risk-free rate 3% and the market return 7%. Find the WACC.

β = 1.1rf = 3%rm = 7%rd = 5%T = 28%
WACC = %
6.Hard
WACC = ?equity1 000 000 × €37.00β = 1.8rf​ = 2%, rm​ = 8.5%debt5 000 × €960rd​ = 6%T = 28%

A company has 1 000 000 shares at €37.00 each and 5 000 bonds trading at €960 each. The pre-tax cost of debt is 6% and the tax rate is 28%. The share’s beta is 1.8, the risk-free rate 2% and the market return 8.5%. Find the WACC.

β = 1.8rf = 2%rm = 8.5%rd = 6%T = 28%
WACC = %

Answer key

  1. 1. β = 0.6
  2. 2. re = 6.9 %
  3. 3. WACC = 7.843 %
  4. 4. WACC = 13.17 %
  5. 5. WACC = 6.542 %
  6. 6. WACC = 12.62 %

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