Learn CFA Corporate Finance Level 2 Syllabus with more illustrations and case studies
What you'll learn
Master Reading 23 Capital Budgeting
Master Reading 24 Capital Structure
Master Reading 25: Dividends and Shares Repurchase: Analysis
Requirements
CFA Level 1 Corporate Finance
Description
Welcome to Corporate Finance CFA Level 2 Course.
As the name indicates, this course covers Corporate Finance Paper of Level 2 of CFA Exams.
About Coverage
Section 1 will cover Reading 23: Capital Budgeting
Section 2 will cover Reading 24: Capital Structure
Section 3 will cover Reading 25:Dividends and Share Purchases: Analysis
Teaching and Learning Style
This course is structured in self paced learning style. It is suggested to take screenshots of case studies for reference back during problem solving. Approaching the course with note book and pen or MS Excel and solving problems paralelly along with instructor will make you feel like attending real class and improve your listening and learning experience.
Teaching and Learning outcomes
By taking this course, you will be able to
calculate the yearly cash flows of expansion and replacement capital projects and evaluate how the choice of depreciation method affects those cash flows;explain how inflation affects capital budgeting analysis;evaluate capital projects and determine the optimal capital project in situations of a) mutually exclusive projects with unequal lives, using either the least common multiple of lives approach or the equivalent annual annuity approach, and b) capital rationing;explain how sensitivity analysis, scenario analysis, and Monte Carlo simulation can be used to assess the stand-alone risk of a capital project;explain and calculate the discount rate, based on market risk methods, to use in valuing a capital project;describe types of real options and evaluate a capital project using real options;describe common capital budgeting pitfalls;calculate and interpret accounting income and economic income in the context of capital budgeting;distinguish among the economic profit, residual income, and claims valuation models for capital budgeting and evaluate a capital project using each.explain the Modigliani–Miller propositions regarding capital structure, including the effects of leverage, taxes, financial distress, agency costs, and asymmetric information on a company's cost of equity, cost of capital, and optimal capital structure;describe target capital structure and explain why a company's actual capital structure may fluctuate around its target;describe the role of debt ratings in capital structure policy;explain factors an analyst should consider in evaluating the effect of capital structure policy on valuation;describe international differences in the use of financial leverage, factors that explain these differences, and implications of these differences for investment analysis.compare theories of dividend policy and explain implications of each for share value given a description of a corporate dividend action;describe types of information (signals) that dividend initiations, increases, decreases, and omissions may convey;explain how clientele effects and agency issues may affect a company's payout policy;explain factors that affect dividend policy;calculate and interpret the effective tax rate on a given currency unit of corporate earnings under double taxation, dividend imputation, and split-rate tax systems;compare stable dividend, constant dividend payout ratio, and residual dividend payout policies, and calculate the dividend under each policy;explain the choice between paying cash dividends and repurchasing shares;describe broad trends in corporate dividend policies;calculate and interpret dividend coverage ratios based on a) net income and b) free cash flow;identify characteristics of companies that may not be able to sustain their cash dividend.
Teaching Background
Indian scenario has been considered for explaining concepts through case studies.
Wishing you all the very best to excel in Finance World.
Overview
Section 1: Reading 23: Capital Budgeting
Lecture 1 Capital Expenditure
Lecture 2 How to Evaluate Projects
Lecture 3 Principles in Capital Budgeting
Lecture 4 Cash Flow and After tax principle
Lecture 5 Incremental Principle
Lecture 6 Factors affecting Incremental Cash Flow
Lecture 7 Inflation adj principle
Lecture 8 Long Term Fund Principle
Lecture 9 Capital Budgeting Steps
Lecture 10 Case Study NPV
Lecture 11 Case Study NPV
Lecture 12 NPV Case Study on Tax Savings 2
Lecture 13 NPV Case Study on Tax Savings
Lecture 14 Case Study NPV Tax Benefit
Lecture 15 Case Study NPV Tax Benefit
Lecture 16 NPV using Incremental Discount Rate Case Study
Lecture 17 NPV Case Study Opportunity Cost
Lecture 18 Cost Reduction Projects (Introduction)
Lecture 19 Cost Reduction Projects
Lecture 20 Case Study Cost Reduction Projects
Lecture 21 Case Study Cost Reduction Projects
Lecture 22 Cash Flows - Point of View
Lecture 23 Case Study Point of View
Lecture 24 Case Study Point of View
Lecture 25 Project and Equity IRR
Lecture 26 Abandonment Decision
Lecture 27 Abandonment Decision
Lecture 28 Replacement Decision (Excel based)
Lecture 29 Replacement Decision
Lecture 30 Aggregate Cash Flow Method (Excel based)
Lecture 31 Incremental Cash Flow Method (Excel based)
Lecture 32 Incremental Cash Flow Method (Hand written)
Lecture 33 Replacement Analysis Case Study 1
Lecture 34 Replacement Analysis Case Study 2
Lecture 35 Replacement Analysis Case Study 3
Lecture 36 Replacement Analysis Case Study 4
Lecture 37 Equated Annual Benefit & Cost
Lecture 38 Equivalent Annual Cost CS
Lecture 39 NPV over Different Life
Lecture 40 Incremental Cash Flow Method
Lecture 41 Limitations of Incremental Cash Flow Method
Lecture 42 Money and Real Cash Flows
Lecture 43 Money Disc Rate and Real Disc Rate
Lecture 44 Inflation and Multiple Cash Flow terms
Lecture 45 Intersection of Money and Real terms with inflation
Lecture 46 Money Cash Flow and Real Cash Flow Case Study 1
Lecture 47 Money Cash Flow and Real Cash Flow Case Study 2
Lecture 48 Money Cash Flow and Real Cash Flow Case Study 3
Lecture 49 Money Cash Flow and Real Cash Flow Case Study 4
Lecture 50 Present Value of Cash Flows from MCF and RCF
Lecture 51 Issues with Inflation Rate 1
Lecture 52 Issues with Inflation Rate 2 and Case Study
Lecture 53 Risk and Uncertainity
Lecture 54 Case Study Risk Uncertainity
Lecture 55 Probability and PD
Lecture 56 Expected Value
Lecture 57 Case study EV
Lecture 58 Standard Deviation
Lecture 59 Steps in Computing Standard Deviation
Lecture 60 Standard Deviation - Simple Case Study
Lecture 61 SD in Decision Making
Lecture 62 Case Stdy SD Decision Making
Lecture 63 Risk Adjusted Discount Rate
Lecture 64 Case Study RADR
Lecture 65 Case Study 2 RADR
Lecture 66 Certainity Equivalent Factor
Lecture 67 Certainity Equivalent Factor Example
Lecture 68 Case Study Certainity Equivalent Factor
Lecture 69 Sensitivity Analysis
Lecture 70 Case Study Sensitivity Analysis
Lecture 71 Comprehensive Case Study on Sensitivity Analysis
Lecture 72 Decision Tree Introduction
Lecture 73 Stages and Rules
Lecture 74 Evaluation rules
Lecture 75 Case Study 1 Decision Tree
Lecture 76 Case Study 2 Decision Tree
Lecture 77 Decision Tree Comprehensive Case Study
Lecture 78 Simulation Introduction
Lecture 79 Simulation eg
Lecture 80 Simulation steps
Lecture 81 Case Study Simulation
Lecture 82 Hilliers Model
Lecture 83 Hillier Case Study part 1
Lecture 84 Hillier Case Study part 2
Lecture 85 Sensitivity and Scenario Analysis in Capital Budgeting - Introduction
Lecture 86 Steps in Scenario Analysis
Lecture 87 Case Study 1 Scenario Analysis
Lecture 88 Case Study 2 Part 1 Scenario Analysis
Lecture 89 Case Study 2 part 2 Scenario Analysis
Section 2: Reading 24: Capital Structure
Lecture 90 Business Financing Decisions
Lecture 91 Debt Vs Equity Financing Decision
Lecture 92 Good Time and Bad Time for Debt Equity Funding
Lecture 93 Capital Structure
Lecture 94 Capital Structure (Talking Head)
Lecture 95 Capital Structure Mix (Talking Head)
Lecture 96 Factors of Capital Structure Mix (Talking Head)
Lecture 97 Desining Optimal Capital Structure (Talking Head)
Lecture 98 Capital Structure Case Study 1(Talking Head)
Lecture 99 Capital Structure case Study 2 (Talking Head)
Lecture 100 Capital Structure case Study 3 (Talking Head)
Lecture 101 Capital Structuring Case Study 4
Lecture 102 Case Study on Capital Structuring and Tax Shield
Lecture 103 Financial Break Even and Indifference Analysis
Lecture 104 Capital Structure Theories - Net Income Approach
Lecture 105 Capital Structure Theories - Net Operating Income Approach
Lecture 106 Net Income Approach Problem
Lecture 107 Capital Structure Theories - Traditional Approach
Lecture 108 Capital Structure Theories - MM Approach and Arbitrage Case Study
Lecture 109 Case study on Arbitrage
Section 3: Dividends and Share Repurchases: Analysis
Lecture 110 Introduction to the course and dividend
Lecture 111 Case Study on Basic terms of dividend
Lecture 112 Dividend Dates
Lecture 113 Case Study Dividend Dates
Lecture 114 Strategic benefits of Merger
Lecture 115 Dividends and Market Price
Lecture 116 Different Valuation Models
Lecture 117 Dividend Policy
Lecture 118 Asset based Valuation Model
Lecture 119 Case Study Asset Based Valuation Model
Lecture 120 Common Sense Approach
Lecture 121 Dividend Models
Lecture 122 Walter Model
Lecture 123 Walter Model Case Study
Lecture 124 Lintner model
Lecture 125 Lintner model Case study
Lecture 126 MM Model
Lecture 127 MM Model Formula
Section 4: FINAL SECTION
Lecture 128 Bonus Lecture
CFA Level 2 Students,,
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