Financial Management Cost of Capital Premium class

Ca Raja Natarajan, Chartered Accountant

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22 Videos (1h 51m)
    • Introduction to Cost of Capital

    • Weighted Average Cost of Capital

    • Cost of Debt

    • Cost of Irredeemable Debentures

    • Cost of Redeemable Debentures

    • Case Study on Cost of Debentures

    • Cost of Preference Shares

    • Cost of Redeemable Preference Shares

    • Cost of Equity

    • Cost of Equity under Dividends Price Approach

    • Cost of Equity under Earnings Price Approach

    • Cost of Equity under Realised Yield Approach

    • Cost of Equity under Capital Asset Pricing Model

    • Case Study on Cost of Equity

    • Case Study on Implied Return on Equtiy

    • Case Study on Cost of Equity with Additional Finance

    • Case Study on WACC

    • Case Study on WACC and Cost of Equity

    • Case Study on WACC (Book Value and Market Value)

    • Case Study on WACC (with Additional Borrowings)

    • Case Study on WACC (with Book Value and Market Value)

    • Case Study on WACC (Market Value)


About This Class

This course is about Cost of Capital.

Every business raise various forms of Capital for running the business.

None of the funds are free.

Each fund comes with a cost.

Every Entrepreneur, every Finance Manager should be aware of the Cost of Capital of their business.

Many businesses fail, because the management itself would not be aware of the Cost of Capital of the business.

Unless the returns earned from the business is greater than or equal to cost of capital, no business can sustain / grow.

Cost of Capital is used to evaluate new projects of a company. It is the minimum return that investors expect for providing capital to the company, thus setting a benchmark that a new project has to meet.

For an investment to be worthwhile, the expected return on capital must be greater than the cost of capital. The cost of capital is the rate of return that capital could be expected to earn in an alternative investment of equivalent risk. If a project is of similar risk to a company's average business activities it is reasonable to use the company's average cost of capital as a basis for the evaluation. A company's securities typically include both debt and equity, one must therefore calculate both the cost of debt and the cost of equity to determine a company's cost of capital. However, a rate of return larger than the cost of capital is usually required.

This course explains the technicalities involved in computation of Cost of Capital through simple examples, case studies, etc.

Students will learn how to compute

a) Cost of Equity;

b) Cost of Preference Share Capital;

c) Cost of Debt Funds.

Students will also learn how to compute the Weighted Average Cost of Capital.

Knowledge on Weighted Average Cost of Capital is very important for any one who is planning to pursue career in Finance.

This course is structured in self learning pace.

Take this course to understand the nuances of Cost of Capital for running profitable business.

Mandatory Disclosure regarding course contents:

The contents of this course will also be available in

a) Financial Management - A Complete Study

b) Accounting, Finance and Banking - A Comprehensive Study

courses, which are comprehensive in nature. If you have already purchased any of the above two courses, then you need purchase this course.






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Ca Raja Natarajan

Chartered Accountant

I am a Chartered Accountant with tonnes of passion for teaching.

I teach Financial Management for Chartered Accountancy and Cost and Management Accountancy students in Ernakulam,India. and I teach 100+ Finance, Accounts, Costing, Banking, Credit Analysis, Statistics, etc. in Skillshare.  

I also hold

  1. Post Graduate Diploma in Business Administration in Finance from Symbiosis, Pune
  2. Bachelors in Commerce, from Loyola College, Chennai.

I worked in State Bank of India as Assistant Vice President - Credit for a period of four years after which i started my Chartered Accountancy Practice.

During the stint in State Bank of India, I worked on credit proposals of Mid Corporate Units and gained good experience in

a) Financial Analysis

b) Risk Assessment

c) Viability Study

d) Evaluating business models

e) Project Finance

f) Working Capital Management, etc.

I conduct work shops for Entrepreneurs, Chartered Accountancy / Cost and Management Accountancy Students on the topics like

a) Project Finance

b) Credit Risk Assessment

c) Entrepreneurship Development

d) Finance for Non Finance Executives

e) Burning Desire for Entrepreneurship

I love teaching and i want fundamentals of accounting and finance to reach students and so i am here.