This week’s topics
Long-Term Capital Structure and Funding Selection
- Weighted average cost of capital (WACC)
- Equity versus debt financing strategies
- Hybrid instruments and mezzanine finance
- Financial risk profiling and covenant design
- Session 13: Estimating Hurdle Rates- Financing Weights & Cost of Capital
- CIMA F3 Long term debt finance
- Cost of Capital (WACC)
What you will be able to do
- 4.2 Appraise appropriate sources of short term and funds for an organisation.
- 4.3 Justify choices of sources of funds using a range of criteria related to cost and risk.
Activity
Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: appraise appropriate sources of short term and funds for an organisation.
Study materials
Videos
- Session 13: Estimating Hurdle Rates- Financing Weights & Cost of Capital · YouTube · Aswath Damodaran · 13 min · for registered students
- CIMA F3 Long term debt finance · YouTube · OpenTuition · 20 min · for registered students
- Cost of Capital (WACC) · YouTube · Kaplan UK · 29 min · for registered students
- Session 18 (MBA): The Cost of Capital and Optimizing Debt · YouTube · Aswath Damodaran · 87 min · for registered students
Further resources
- How Do CFOs Make Capital Budgeting and Capital Structure Decisions? · PDF · Reading, article · 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.