About this course

This course provides a detailed understanding of how to evaluate the financial performance and valuation of a company. Learners will acquire skills in estimating the expected return of equity and debt instruments, calculating the weighted average cost of capital (WACC), and understanding the impacts of different capital structures on a firm's risk and valuation. Practical Excel modeling techniques will be applied to real business cases, enabling hands-on learning in constructing valuation models.

What students will learn from the course

• Methods to measure and interpret the risk of financial assets.
• Techniques to estimate the expected returns of assets based on associated risks.
• The impact of changes in capital structure on a firm's equity and debt risk.
• How to calculate WACC, an essential metric for firm valuation.

Prerequisites or skills necessary to complete the course

Participants should have a basic understanding of accounting principles and be proficient in Microsoft Excel. It is recommended that students have previously completed courses on Introduction to Corporate Finance and The Free Cash Flow Method for Firm Valuation.

Course Content

• Risk and return fundamentals and the Capital Asset Pricing Model (CAPQ).
• Detailed explanation and calculation of the Weighted Average Cost of Capital (WACC).
• The effect of various capital structures on WACC and overall firm risk.
• Case study analysis for practical understanding and application.

Who this course is for

This course is designed for individuals looking to deepen their understanding of corporate finance, particularly in the areas of investment valuation and financial strategy. It is ideal for finance professionals, business students, and anyone interested in corporate finance and capital investments.

Application of skills in the real world

The skills learned can be directly applied to roles in financial analysis, investment banking, corporate finance planning, and consultancy. Learners will be equipped to assess investment opportunities, conduct firm valuations, and make strategic financial decisions that can influence the growth and sustainability of a business.

Syllabus

1. Week 1: Risk, return, and the Capital Asset Pricing Model (CAPM).
2. Week 2: The Weighted Average Cost of Capital (WACC) and the effect of capital structure on WACC.
3. Week 3: Case study: Estimating the WACC.
4. Week 4: Valuation capstone case.