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CFA Corporate Finance Level 2
Rating: 3.8 out of 5(25 ratings)
3,166 students

CFA Corporate Finance Level 2

Learn CFA Corporate Finance Level 2 Syllabus with more illustrations and case studies
Last updated 6/2021
English

What you'll learn

  • Master Reading 23 Capital Budgeting
  • Master Reading 24 Capital Structure
  • Master Reading 25: Dividends and Shares Repurchase: Analysis

Course content

4 sections128 lectures17h 12m total length
  • Capital Expenditure3:19
  • How to Evaluate Projects2:09
  • Principles in Capital Budgeting0:33
  • Cash Flow and After tax principle4:46
  • Incremental Principle5:02
  • Factors affecting Incremental Cash Flow10:03
  • Inflation adj principle1:58
  • Long Term Fund Principle4:34
  • Capital Budgeting Steps5:18
  • Case Study NPV1:00
  • Case Study NPV16:24
  • NPV Case Study on Tax Savings 210:19
  • NPV Case Study on Tax Savings8:20
  • Case Study NPV Tax Benefit1:00
  • Case Study NPV Tax Benefit12:14
  • NPV using Incremental Discount Rate Case Study18:02
  • NPV Case Study Opportunity Cost14:17
  • Cost Reduction Projects (Introduction)0:58
  • Cost Reduction Projects0:58
  • Case Study Cost Reduction Projects1:00
  • Case Study Cost Reduction Projects17:18
  • Cash Flows - Point of View4:19
  • Case Study Point of View1:00
  • Case Study Point of View23:01
  • Project and Equity IRR24:59
  • Abandonment Decision6:13
  • Abandonment Decision4:20
  • Replacement Decision (Excel based)5:21
  • Replacement Decision4:38
  • Aggregate Cash Flow Method (Excel based)1:18
  • Incremental Cash Flow Method (Excel based)7:20
  • Incremental Cash Flow Method (Hand written)6:14
  • Replacement Analysis Case Study 118:13
  • Replacement Analysis Case Study 218:17
  • Replacement Analysis Case Study 310:54
  • Replacement Analysis Case Study 411:10
  • Equated Annual Benefit & Cost3:52
  • Equivalent Annual Cost CS15:28
  • NPV over Different Life14:36
  • Incremental Cash Flow Method6:14
  • Limitations of Incremental Cash Flow Method0:44
  • Money and Real Cash Flows5:54
  • Money Disc Rate and Real Disc Rate7:35
  • Inflation and Multiple Cash Flow terms4:46
  • Intersection of Money and Real terms with inflation11:17
  • Money Cash Flow and Real Cash Flow Case Study 13:50
  • Money Cash Flow and Real Cash Flow Case Study 27:56
  • Money Cash Flow and Real Cash Flow Case Study 323:16
  • Money Cash Flow and Real Cash Flow Case Study 414:01
  • Present Value of Cash Flows from MCF and RCF4:09
  • Issues with Inflation Rate 110:25
  • Issues with Inflation Rate 2 and Case Study13:57
  • Risk and Uncertainity7:43
  • Case Study Risk Uncertainity2:59
  • Probability and PD5:58
  • Expected Value2:19
  • Case study EV2:15
  • Standard Deviation4:04
  • Steps in Computing Standard Deviation2:21
  • Standard Deviation - Simple Case Study9:24
  • SD in Decision Making3:37
  • Case Stdy SD Decision Making13:12
  • Risk Adjusted Discount Rate9:00
  • Case Study RADR6:25
  • Case Study 2 RADR14:30
  • Certainity Equivalent Factor3:18
  • Certainity Equivalent Factor Example9:05
  • Case Study Certainity Equivalent Factor8:27
  • Sensitivity Analysis7:39
  • Case Study Sensitivity Analysis23:12
  • Comprehensive Case Study on Sensitivity Analysis30:18
  • Decision Tree Introduction1:08
  • Stages and Rules2:41
  • Evaluation rules2:19
  • Case Study 1 Decision Tree17:20
  • Case Study 2 Decision Tree13:55
  • Decision Tree Comprehensive Case Study36:15
  • Simulation Introduction4:04
  • Simulation eg7:56
  • Simulation steps6:17
  • Case Study Simulation21:00
  • Hilliers Model9:06
  • Hillier Case Study part 19:29
  • Hillier Case Study part 214:56
  • Sensitivity and Scenario Analysis in Capital Budgeting - Introduction2:56
  • Steps in Scenario Analysis2:12
  • Case Study 1 Scenario Analysis9:23
  • Case Study 2 Part 1 Scenario Analysis15:45
  • Case Study 2 part 2 Scenario Analysis15:37

Requirements

  • CFA Level 1 Corporate Finance

Description

Welcome to Corporate Finance CFA Level 2 Course. 

As the name indicates, this course covers Corporate Finance Paper of Level 2 of CFA Exams.

About Coverage:

Section 1 will cover Reading 23: Capital Budgeting

Section 2 will cover Reading 24: Capital Structure

Section 3 will cover Reading 25:Dividends and Share Purchases: Analysis

Teaching and Learning Style:

This course is structured in self paced learning style. It is suggested to take screenshots of case studies for reference back during problem solving. Approaching the course with note book and pen or MS Excel and solving problems paralelly along with instructor will make you feel like attending real class and improve your listening and learning experience.   

 Teaching and Learning outcomes:

By taking this course, you will be able to

  1. calculate the yearly cash flows of expansion and replacement capital projects and evaluate how the choice of depreciation method affects those cash flows;
  2. explain how inflation affects capital budgeting analysis;
  3. evaluate capital projects and determine the optimal capital project in situations of               a) mutually exclusive projects with unequal lives, using either the least common multiple of lives approach or the equivalent annual annuity approach, and b) capital rationing;
  4. explain how sensitivity analysis, scenario analysis, and Monte Carlo simulation can be used to assess the stand-alone risk of a capital project;
  5. explain and calculate the discount rate, based on market risk methods, to use in valuing a capital project;
  6. describe types of real options and evaluate a capital project using real options;
  7. describe common capital budgeting pitfalls;
  8. calculate and interpret accounting income and economic income in the context of capital budgeting;
  9. distinguish among the economic profit, residual income, and claims valuation models for capital budgeting and evaluate a capital project using each.
  10. explain the Modigliani–Miller propositions regarding capital structure, including the effects of leverage, taxes, financial distress, agency costs, and asymmetric information on a company’s cost of equity, cost of capital, and optimal capital structure;
  11. describe target capital structure and explain why a company’s actual capital structure may fluctuate around its target;
  12. describe the role of debt ratings in capital structure policy;
  13. explain factors an analyst should consider in evaluating the effect of capital structure policy on valuation;
  14. describe international differences in the use of financial leverage, factors that explain these differences, and implications of these differences for investment analysis.
  15. compare theories of dividend policy and explain implications of each for share value given a description of a corporate dividend action;
  16. describe types of information (signals) that dividend initiations, increases, decreases, and omissions may convey;
  17. explain how clientele effects and agency issues may affect a company’s payout policy;
  18. explain factors that affect dividend policy;
  19. calculate and interpret the effective tax rate on a given currency unit of corporate earnings under double taxation, dividend imputation, and split-rate tax systems;
  20. compare stable dividend, constant dividend payout ratio, and residual dividend payout policies, and calculate the dividend under each policy;
  21. explain the choice between paying cash dividends and repurchasing shares;
  22. describe broad trends in corporate dividend policies;
  23. calculate and interpret dividend coverage ratios based on a) net income and b) free cash flow;
  24. identify characteristics of companies that may not be able to sustain their cash dividend.

Teaching Background:

Indian scenario has been considered for explaining concepts through case studies.

Wishing you all the very best to excel in Finance World.

Who this course is for:

  • CFA Level 2 Students