CFA Corporate Finance Level 1 (Part 1)

Learn Capital Budgeting, Cost of Capital and Measures of Leverage in this part course meant for CFA
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  • Lectures 101
  • Contents Video: 13.5 hours
    Other: 8 mins
  • Skill Level All Levels
  • Languages English
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About This Course

Published 12/2014 English

Course Description

Welcome to Corporate Finance CFA Level 1 (Part 1) Course. 

As the name indicates, this course covers part of syllabus of Corporate Finance Paper of Level 1 of CFA Exams.

About Coverage:

Section 1 will cover Reading 36 - Capital Budgeting

Section 2 will cover Reading 37 - Cost of Capital 

Section 3 will cover Reading 38 - Measures of Leverage.

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. describe the capital budgeting process and distinguish among the various categories of capital projects;
  2. describe the basic principles of capital budgeting;
  3. explain how the evaluation and selection of capital projects is affected by mutually exclusive projects, project sequencing, and capital rationing;
  4. calculate and interpret net present value (NPV), internal rate of return (IRR), payback period, discounted payback period, and profitability index (PI) of a single capital project;
  5. explain the NPV profile, compare the NPV and IRR methods when evaluating independent and mutually exclusive projects, and describe the problems associated with each of the evaluation methods;
  6. describe expected relations among an investment’s NPV, company value, and
    share price.
  7. calculate and interpret the weighted average cost of capital (WACC) of a company; 
  8. describe how taxes affect the cost of capital from different capital sources; 
  9. describe the use of target capital structure in estimating WACC and how target capital structure weights may be determined
  10. explain how the marginal cost of capital and the investment opportunity schedule are used to determine the optimal capital budget; 
  11. explain the marginal cost of capital’s role in determining the net present value of a project;
  12. calculate and interpret the cost of debt capital using the yield-to-maturity approach and the debt-rating approach; 
  13. calculate and interpret the cost of noncallable, nonconvertible preferred stock; 
  14. calculate and interpret the cost of equity capital using the capital asset pricing model approach, the dividend discount model approach, and the bond-yieldplus risk-premium approach; 
  15. calculate and interpret the beta and cost of capital for a project; 
  16. describe uses of country risk premiums in estimating the cost of equity; 
  17. describe the marginal cost of capital schedule, explain why it may be upwardsloping with respect to additional capital, and calculate and interpret its break-points; 
  18. explain and demonstrate the correct treatment of flotation costs.
  19. define and explain leverage, business risk, sales risk, operating risk, and financial
    risk and classify a risk; 
  20. calculate and interpret the degree of operating leverage, the degree of financial leverage, and the degree of total leverage; 
  21. analyze the effect of financial leverage on a company’s net income and return on equity; 
  22. calculate the breakeven quantity of sales and determine the company’s net income at various sales levels; 
  23. calculate and interpret the operating breakeven quantity of sales.

Teaching Background:

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

Video Lectures status:

Of the above content, around 70% lectures have been added as on 01st September 2016 and balance will be added in due course.

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

What are the requirements?

  • Basics of Finance

What am I going to get from this course?

  • Master Reading 36 Capital Budgeting of Corporate Finance CFA L1
  • Master Reading 37 Cost of Capital of Corporate Finance CFA L1
  • Master Reading 38 Measures of Leverage of Corporate Finance CFA L1

What is the target audience?

  • This course is structured only for CFA Students following CFA Corporate Finance Syllabus

What you get with this course?

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Certificate of completion.

Curriculum

Section 1: Reading 36 - Capital Budgeting
Capital Budgeting Process
Preview
01:35
Types of Capital Investment Decisions
02:03
Project Cash Flows
04:31
Principles for Measuirng Project Cash Flows
02:01
Measuring cash flows Case Study 1
02:31
Measuring Cash Flows Case Study 2
10:38
Cashflow computation Case Study 3
16:08
Cash Flow Perspective Case Study 4
13:18
Capital Budgeting Techniques
00:43
Capital Budgeting Tools (Taking Head)
03:06
Payback period (Talking Head)
04:20
Pay Back Period Introduction
02:36
Pay Back Period Example
03:41
PayBack Period Case Study 1 - Taking Head
04:08
PayBack Period Case Study 2 - Taking Head
08:39
PayBack Period Case Study 3
01:19
Payback Reciprocal
00:51
Accounting Rate of Return
04:10
Discounted Pay Back Period Method
03:26
NPV
10:49
NPV Technique
04:42
Advantages and Disadvantages of NPV
00:49
NPV Case Study 1
04:30
NPV Case Study 2
07:03
NPV Case Study 3
05:48
NPV Case Study 4
20:31
NPV of Different Projects Case Study 5
06:00
NPV Incremental Discount Rate Case Study 6
18:02
NPV Case Study 7
15:56
NPV & Tax Savings Case Study 8
08:20
NPV & Tax Savings Case Study 9
10:19
NPV based on Opportunity Cost Case Study 10
14:17
Equivalent Annual CF and Case Study 11
14:05
NPV (Projects with different life period) Case Study 12
14:35
Abandonment Decision in Replacement Case Study 13
04:20
Equivalent Annual Cost Case Study 14
15:28
Replacement Decision
05:21
Aggregate Cash Flow Method in Replacement
01:18
Incremental Cash Flow Method in Replacement
07:20
Replacement Analysis Case Study 1
18:13
Replacement Analysis Case Study 2
18:17
Replacement Analysis Case Study 3
10:54
Replacement Analysis Case Study 4
11:10
Profitability Index
02:24
Profitability Index Case Study 1
02:31
Profitability Index Case Study 2
21:19
Problem NPV and Capital Rationing PI Case Study 3
09:43
IRR Introduction
04:29
Advantages and Disadvantages of IRR
01:14
IRR Simple Case Study 1
18:09
IRR Case Study 2
06:44
IRR Case Study 3
05:55
IRR Case Study 4
07:05
Modified IRR
04:28
IRR ARR NPV and Ranking Case Study 5
18:10
IRR Discounted Pay Back Period Profitability Inded and Ranking Case Study 6
13:01
Pay Back IRR ARR NPV and Ranking Case Study 7
12:42
IRR Mutually Exclusive Projects and Reinvestment Case Study 8
08:19
NPV and IRR Suitability Case Study 9
02:03
Project and Equity IRR Case Study 10
24:59
Section 2: Reading 37 - Cost of Capital
Introduction to Cost of Capital
Preview
05:17
Weighted Average Cost of Capital
03:44
Cost of Debt
Preview
04:59
Cost of Irredeemable Debentures
00:51
Cost of Redeemable Debentures
03:02
Case Study on Cost of Debentures
05:14
Cost of Preference Shares
Preview
01:45
Cost of Redeemable Preference Shares
01:14
Cost of Equity
Preview
01:18
Cost of Equity under Dividends Price Approach
03:32
Cost of Equity under Earnings Price Approach
00:46
Cost of Equity under Realised Yield Approach
04:06
Cost of Equity under Capital Asset Pricing Model
03:37
Case Study on Cost of Equity
04:04
Case Study on Implied Return on Equtiy
04:26
Case Study on Cost of Equity with Additional Finance
06:23
Case Study on WACC
Preview
02:02
Case Study on WACC and Cost of Equity
01:08
Case Study on WACC (Book Value and Market Value)
21:21
Case Study on WACC (with Additional Borrowings)
09:44
Case Study on WACC (with Book Value and Market Value)
12:25
Case Study on WACC (Market Value)
10:03
Section 3: Reading 38 - Measures of Leverage
Introduction to Leverage (Talking Head)
08:32
Leverage Formula (Talking Head)
11:28
Leverage Analysis Case Study 1 (Talking Head)
13:54
Leverage Analysis Case Study 2 (Talking Head)
16:34
Leverage Analysis Case Study 3 (Talking Head)
11:27
Leverage and its Types
03:43
Leverage Concept Example
06:10
Leverage Analysis and Sales Movement
07:21
Case study on Degree of Leverage
05:21
Case study on Degree of Operating Leverage
06:05
Case Study 2 on Degree of Leverage
05:35
Case Study 3 on Degree of Leverage
07:13
Optimal Capital Structure Explanation
00:58
Indifference Point - Taking Head
07:16
Indifferent Point Case Study 1 - Talking Head
08:16

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Instructor Biography

I am a practicing Chartered Accountant with tonnes of passion for teaching.

I teach Financial Management & Strategic Financial Management for Chartered Accountancy, Cost and Management Accountancy and Company Secretary students in Ernakulam, India. I also hold Post Graduate Diploma in Business Administration in Finance from Symbiosis, Pune and Bachelors in Commerce, from Loyola College, Chennai.

I worked in State Bank of India as Assistant Vice President - Credit for a period of four years after which i started my Chartered Accountancy Practice. During the stint in State Bank of India, I worked on credit proposals of Mid Corporate Units and gained good experience in Financial Analysis, Risk Assessment, Viability Study, Evaluating business models, Project Finance, Working Capital Management, etc.

I conduct work shops for Entrepreneurs, Chartered Accountancy / Cost and Management Accountancy Students on the topics like Project Finance, Credit Risk Assessment, Entrepreneurship Development, Finance for Non Finance Executives, etc.

I love teaching and i want fundamentals of accounting and finance to reach students and so i am here.

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