Corporate Finance - Part 3

Corporate Finance - Part 3

Overview

This tutorial will provide you with the quantitative tools needed to evaluate capital budgeting opportunities to maximise the value of a firm. We determine debt and equity capital costs. We compare the company’s cost of capital and the return earned on that invested capital.

Objective

On completion of this tutorial, you will be able to:
- Use a free cash flow (FCF) analysis and economic profit approach to quantify a capital budgeting opportunity
- Outline the similarities and differences between the FCF and economic profit approach
- Calculate the terminal value of a project
- Describe the various qualitative issues to be addressed when conducting a capital budgeting analysis, and adopt an approach for dealing with 'strategic' investments
- Describe the risk/return nature of debt capital and the tax benefits
- Explain the capital asset pricing model (CAPM) and how it is used to determine the cost of equity capital
- Calculate the weighted average cost of capital (WACC) for a company
- Describe the common pitfalls in the use of cost of capital

Content

Module 1: Corporate Finance - Capital Budgeting
Topic 1: Free Cash Flow Approach to Capital Budgeting
Topic 2: Economic Profit Approach to Capital Budgeting
Topic 3: Qualitative Issues & Strategic Investments
Topic 4: Terminal Value

Module 2: Corporate Finance - Cost of Capital
Topic 1: Cost of Debt Capital
Topic 2: Cost of Equity Capital
Topic 3: Weighted Average Cost of Capital (WACC)
Topic 4: Cost of Capital Pitfalls

Details

Code
TEPCF17000301
Venue
ePlatform
Language
English
Level
Intermediate
Hours
SFC:2.5, PWMA:2.5
Fees
All Member: HK$700
Non-Member: HK$975
Staff of Corporate Member: HK$700