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Enrolled:
133
Duration: 1 Hour
Level: Advanced
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The cost of capital is the expression used in finance for the cost of a company's funds (primarily debt and equity) or, from an investor's point of view, the required rate of return on a company's securities. It is the fundamental discount rate used in a discounted cash flow analysis to evaluate investment projects of a company since it is the minimum return that investors expect for providing capital to a company, thus setting a return benchmark that a project should meet. 

This course:

  • Reviews alternative approaches to estimating the cost of capital, focusing on the Capital Asset Pricing Model (CAPM) and weighted average cost of capital (WACC) calculation.
  • Describes common proxies for the risk-free rate and market return.
  • Discusses alternative ways to estimate a project’s beta and how to adjust for the amount of leverage used.
  • Details how to estimate the cost of debt.
  • Introduces advanced multi-factor versions of the CAPM.

Course Collections

This course is included in the following Course Collections:

Learning Objectives

  • Review the components that make up a company’s cost of capital.
  • Establish alternative approaches and best practices for estimating the different parameters.
  • Improve your ability to develop a more accurate cost of capital discount rate for your investment project evaluations.

29 Reviews (72 ratings)Reviews

4
Anonymous Author
Good refresher
3
Anonymous Author
Great material for calculations.
5
Member's Profile
I thought learning about forecasting beta was interesting.
4
Anonymous Author
not the clearest slides
5
Anonymous Author
I enjoyed taking this course. It taught me the structure and importance of estimating cost of capital.
5
Anonymous Author
This course was very interesting
5
Anonymous Author
Great Course
5
Member's Profile
Great lesson!
4
Anonymous Author
Great breakdown of how to estimate COC. Very helpful for understanding where each calculation comes from.
4
Member's Profile
Slides presented and explained well, however some quiz answers were difficult to determine from the presentation content
5
Member's Profile
Easy to follow.
4
Member's Profile
Powerpoint was good, thought some of the quiz and exam questions were misleading and confusing
5
Member's Profile
I liked the power point
4
Member's Profile
Good overview and more examples with numbers might assist in understanding
4
Anonymous Author
The slides were informative.
3
Member's Profile
Interesting
5
Member's Profile
Excellent Course
4
Anonymous Author
The course was really good to reinforce my basics for Cost of Capital and at some point gave I would expect to have examples more related to the market where I'am devloping my carrer that is ver dynamic and probably the measure of the variables is also complex to identify.
5
Anonymous Author
Good review of key concepts.
4
Member's Profile
It's useful to understand the CAPM model.
5
Anonymous Author
Very comprehensive course that is well presented at a very fast pace
5
Anonymous Author
Good overview of elements of financial management
4
Member's Profile
Good overview
5
Member's Profile
Easy to follow on a complex topic!
4
Member's Profile
Such a complex topic but covered well using various pricing models.
5
Member's Profile
Excellent update of current use of WACC in today's capital market analysis.
5
Anonymous Author
Truly a difficult topic but nicely explained and well presented. Presentation is easily understandable.
3
Anonymous Author
I do not think I have seen a course with this many formulas since I was in college. However Jake did a good job explaining each part of the formula so that they were understandable.
5
This is a course to take if: -You need a refresher on putting together a WACC -You would like an *easier* way to get there. -You're a skilled Finance pro. This has most of the meat of several weeks of study. It is worth reviewing over time, as it is dense and useful.

Prerequisites

Prerequisite: Previous experience in finance

 

Advanced Preparation: None

 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 ext. 106, or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
Estimating the COC
  8:59WACC Method, CAPM, Beta and Market Risk
  13:50Linear Regression, Forecasting Beta, Unlevered and Project-Based COC
  11:55Beyond CAPM, Multifactor Models of Risk, and FFC
ADDITIONAL METHODS
  5:54Other Approaches and Sources for Estimating the COC
SUPPORTING MATERIALS
  PDFSlides: Estimating the Cost of Capital
  PDFEstimating the Cost of Capital Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM