CourseAF704

Week6 of 16

SemesterII

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This week’s topics

Risk, Return, and Capital Investment Appraisal

Capital Asset Pricing Model (CAPM) and beta estimation
Weighted Average Cost of Capital (WACC) determination
Value at Risk (VaR) and sensitivity analysis
Risk-adjusted Net Present Value (NPV)
Cost of Capital (WACC)
Investment Appraisal Under Uncertainty Sensitivity Analysis (example 1)
CIMA F3 Capital Asset Pricing Model (CAPM) - part 3 - Investment appraisal

What you will be able to do

3.4 Prepare return and risk computations.

Activity

Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: prepare return and risk computations.

Study materials

Videos

Cost of Capital (WACC) · YouTube · Kaplan UK · 29 min · for registered students
Investment Appraisal Under Uncertainty Sensitivity Analysis (example 1) · YouTube · OpenTuition · 27 min · for registered students
CIMA F3 Capital Asset Pricing Model (CAPM) - part 3 - Investment appraisal · YouTube · OpenTuition · 6 min · for registered students
Session 13 (MBA): Time Weighted CF returns, Uncertainty & Equity Analysis · YouTube · Aswath Damodaran · 87 min · for registered students
Session 13: Time Weighted Returns, Equity Analysis and Dealing with Uncertainty · YouTube · Aswath Damodaran · 87 min · for registered students
Session 14: Investment Returns - Equity Analysis and Acquisitions · YouTube · Aswath Damodaran · 80 min · for registered students
Session 11 (MBA): Cost of Capital & First Steps on Investment Analysis · YouTube · Aswath Damodaran · 87 min · for registered students
Session 14: Equity Analysis, Acquisition Valuation and NPV vs IRR · YouTube · Aswath Damodaran · 90 min · for registered students
In Practice Webcast #7a:: Estimating the Cost of Capital for a firm, division or project · YouTube · Aswath Damodaran · 24 min · for registered students
Session 7: Costs of Debt and Capital · YouTube · Aswath Damodaran · 107 min · for registered students

Further resources

MIT 15.401 Finance Theory I, lecture notes: The CAPM and APT · PDF · Other, slides · for registered students
MIT 15.414 Financial Management, lecture notes: Discount Rates in Practice · PDF · Other, slides · for registered students
MIT 15.401 Finance Theory I, lecture notes: Capital Budgeting · 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.

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Course plan

Week 1: Strategic Financial Environment and Resource Allocation
Week 2: Key Financial and Capital Structure Theories
Week 3: Strategic Implementation and Portfolio Management
Week 4: Stakeholder Analysis and Corporate Governance
Week 5: Business Expansion and Stakeholder Impact
Week 6: Risk, Return, and Capital Investment Appraisal
Week 7: Corporate and Business Valuation Techniques
Midterm: Midterm evaluation
Week 9: Organisational Culture in Strategic Formulation
Week 10: Change Management and Cultural Dynamics
Week 11: Financial Analysis and Performance Measurement Systems
Week 12: Applying Strategic Financial Management in practice: case s…
Week 13: Assignment workshop: research, planning and referencing
Week 14: Assignment workshop: drafting, feedback and improvement
Week 15: Review and coursework completion
Final: Final assessment and submission

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