Brief Introduction
Learn how to measure the risk and return of equity and debt; and compute the weighted average of cost of capital.
Description
In this course, you will learn to estimate the expected return of equity and debt. You will also learn to estimate the weighted average cost of capital (WACC), the opportunity cost of capital you should use when discounting the free cash flows to value a firm.
In the process, you will learn to estimate the risk of financial assets and how use this measure of risk to calculate expected returns. You will also learn how the capital structure of a firm affects the riskiness of its equity and debt. Throughout the course, you will learn how to construct Excel models to value firms using hands on activities.
Knowledge
- How to measure risk
- Estimate the expected return of an asset based on its risk
- Adjust the risk of the equity and debt of a firm when the firm changes its capital structure
- Calculate the weighted average cost of capital (essential input to value of firm)