Corporate Finance - Cost of Capital

Overview

Corporate finance essentials

The cost of capital represents a hurdle rate that an organisation must overcome before it can generate value, and it is used extensively in the capital budgeting process. Understand the framework, concepts, and tools for analysing financial decisions based on main types of finance.

With this course you will:

• Learn to calculate the cost of equity finance, considering different expectations of dividend growth.
• Gain practical knowledge about debt finance in a bank environment.
• Understand bond finance and the weighted average cost of capital (WACC).
• Create a better understanding of the capital budgeting process and determine which financing source may be best suited for your organisation.

Acquire new skills to demonstrate your proficiency

• Dividend valuation model and estimating growth
• Cost of debt and tax effect of borrowing
• Relative cost of different types of bank finance
• Irredeemable bonds, redeemable bonds, and convertible bonds
• Post-tax cost of convertible bonds
• WACC

Gain practical experience

Use case studies and scenarios to evaluate business performance and make business decisions based on the cost of capital calculation.

This is a standalone course but if you're interested in more of this type of learning while earning a designation, explore the CGMAr Finance Leadership Program.

Highlights

Key Topics

• Cost of equity finance
• Cost of bank finance
• Cost of bond finance
• Weighted average cost of capital (WACC)

Prerequisites

None

Designed For

Who Will Benefit

• Global accounting and finance professionals
• Management accounting professionals
• Controllers
• CFOs
• Finance vice presidents
• Finance directors
• CPAs and CAs

Objectives

Learning Outcomes

• Calculate the cost of equity considering different expectations of dividend growth.
• Calculate the cost of bank finance.
• Calculate the cost of bond finance.
• Calculate the weighted average cost of capital (WACC).