This week’s topics
Financing risks and capital structure
- Financial leverage and gearing risks
- Weighted average cost of capital
- Refinancing and liquidity risk
- Context-specific funding constraints
- CIMA P3 Financial risk: business risk and gearing risk
What you will be able to do
- 2.1 Compare sources of business finance to support business plans in different business contexts.
- 2.2 Assess the risks associated with different sources of finance in different business contexts.
Activity
Start with this week’s video, then: Seminar, guided reading and a short written task: compare sources of business finance to support business plans in different business contexts.
Study materials
Videos
- CIMA P3 Financial risk: business risk and gearing risk · YouTube · OpenTuition · 34 min · for registered students
- Capital Structure and Financial Ratios – Financial Gearing - ACCA Financial Management (FM) · YouTube · OpenTuition · 27 min · for registered students
- The Cost of Capital - The Effect of Changes in Gearing - ACCA Financial Management (FM) · YouTube · OpenTuition · 32 min · for registered students
- Weighted Average Cost of Capital (WACC) · YouTube · Edspira · 9 min · for registered students
- Capital Structure and Financial Ratios – Operating Gearing - ACCA Financial Management (FM) · YouTube · OpenTuition · 17 min · for registered students
Further resources
- Principles of Finance 2e, ch. 17: How Firms Raise Capital · PDF · OpenStax, textbook chapter; pp. 509–536 · for registered students
- MIT 15.414 Financial Management, lecture notes: Financing Decisions (2) · PDF · Other, slides · for registered students
- MIT 15.414 Financial Management, lecture notes: Discount Rates in Practice · PDF · Other, slides · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
