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​ = 4%β = 1rm​ = 8.5%β = 1.8re​ = ?

The risk-free rate is 4%, the expected market return is 8.5% and a share has a beta of 1.8. Use CAPM to find the required return on the share re.

rf = 4%rm = 8.5%β = 1.8
re = %
2.Easy
βr (%)SMLrf​ = 3.5%β = 1rm​ = 10%β = ?re​ = 12.6%

Investors require a return of 12.6% on a share. The risk-free rate is 3.5% and the expected market return is 10%. Use CAPM to find the beta β of the share.

re = 12.6%rf = 3.5%rm = 10%
β =
3.Medium
WACC = ?equity€6 000 000re​ = 10%debt€5 000 000rd​ = 6%T = 30%

A company has equity worth €6 000 000 and debt worth €5 000 000. Its cost of equity is 10%, its pre-tax cost of debt is 6% and the tax rate is 30%. Find the WACC.

E = €6 000 000D = €5 000 000re = 10%rd = 6%T = 30%
WACC = %
4.Medium
WACC = ?equity€3 000 000re​ = 10%debt€6 000 000rd​ = 7%T = 25.8%

A company has equity worth €3 000 000 and debt worth €6 000 000. Its cost of equity is 10%, its pre-tax cost of debt is 7% and the tax rate is 25.8%. Find the WACC.

E = €3 000 000D = €6 000 000re = 10%rd = 7%T = 25.8%
WACC = %
5.Hard
WACC = ?equity4 000 000 × €25.00β = 1.8rf​ = 3%, rm​ = 9%debt10 000 × €960rd​ = 6%T = 21%

A company has 4 000 000 shares at €25.00 each and 10 000 bonds trading at €960 each. The pre-tax cost of debt is 6% and the tax rate is 21%. The share’s beta is 1.8, the risk-free rate 3% and the market return 9%. Find the WACC.

β = 1.8rf = 3%rm = 9%rd = 6%T = 21%
WACC = %
6.Hard
WACC = ?equity2 000 000 × €10.50β = 0.6rf​ = 3.5%, rm​ = 10.5%debt20 000 × €1 000rd​ = 3%T = 25%

A company has 2 000 000 shares at €10.50 each and 20 000 bonds trading at €1 000 each. The pre-tax cost of debt is 3% and the tax rate is 25%. The share’s beta is 0.6, the risk-free rate 3.5% and the market return 10.5%. Find the WACC.

β = 0.6rf = 3.5%rm = 10.5%rd = 3%T = 25%
WACC = %

Answer key

  1. 1. re = 12.1 %
  2. 2. β = 1.4
  3. 3. WACC = 7.364 %
  4. 4. WACC = 6.796 %
  5. 5. WACC = 13.01 %
  6. 6. WACC = 5.041 %

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