2021 CFA Level I Exam: Study Session 10. Corporate Finance (1)

Why should I choose AnalystNotes?

Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.

Learning Outcome Statements PDF Download

	1. Cost of Capital a. calculate and interpret the weighted average cost of capital (WACC) of a company; b. describe how taxes affect the cost of capital from different capital sources; c. describe the use of target capital structure in estimating WACC and how target capital structure weights may be determined; d. explain how the marginal cost of capital and the investment opportunity schedule are used to determine the optimal capital budget; e. explain the marginal cost of capital's role in determining the net present value of a project;
	2. Cost of Debt and Preferred Stock f. calculate and interpret the cost of debt capital using the yield-to-maturity approach and the debt-rating approach; g. calculate and interpret the cost of noncallable, nonconvertible preferred stock;
	3. Cost of Common Equity h. calculate and interpret the cost of equity capital using the capital asset pricing model approach, the dividend discount model approach, and the bond-yield-plus risk-premium approach;
	4. Estimating Beta and Determining a Project Beta i. calculate and interpret the beta and cost of capital for a project;
	5. Country Risk j. describe uses of country risk premiums in estimating the cost of equity;
	6. Marginal Cost of Capital Structure k. describe the marginal cost of capital schedule, explain why it may be upward-sloping with respect to additional capital, and calculate and interpret its break-points;
	7. Flotation Costs l. explain and demonstrate the correct treatment of flotation costs.

I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!

Barnes

My Own Flashcard

No flashcard found. Add a private flashcard for the reading.

Add