Level 1 2014 CFA® Program – Corporate Finance

This video introduces us to WACC (Weighted Average Cost of Capital). It is basically the firm's discount rate and it's calculation is needed for the discounted cash flow analysis. WACC is also known as Marginal Cost of Capital.

In this session we'll be understanding how the marginal cost of capital and the investment opportunity schedule are used to determine the optimal capital budget.

This session explains how to calculate and interpret the cost of debt through yield-to-maturity approach & the debt-rating approach. We'll also learn about the computation of the cost of noncallable, nonconvertible prefreed stcoks

In this session we'll be studying about the calculation and interpretation of cost of equity using the capital asset pricing model approach, the dividend discount model approach and the bond yield plus risk premium approach.

The following session will help us understand how to calculate the beta for a specific project and how to use it to calculate the cost of capital for that particular project.

In this session we'll be studying about the Country Risk Premium which is added to the market risk premium when we are using CAPM to estimate the cost of equity.

Our this session is concerned with marginal cost of capital (MCC) and the accompanying break-points. We'll also go through the concept of flotation costs, a fee charged by investment bankers when a firm raises external equity.

This session deals with the concept of Break-Even quantity of sales, the level of sales a firm must generate to cover all of its fixed & variable costs, and its calculation.

This session introduces the concept of dividends. We'll be studying about the basics of dividends and the different ways in which cash dividends are given to the shareholders.

The following session is concerned with the process of share repurchase i.e. a firm buying back the shares of its own stock, and the various methods through which it can be accomplished.

In the following session we'll be studying about primary and secondary sources of liquidity and factors that influence a company's liquidity position.