This episode focuses on the role of debt and equity in a company's capital structure, and how the cost of equity and the cost of debt are derived and come together in the WACC equation.  WACC = (Equity/Equity+Debt)*(Cost of Equity) + (Debt/Equity+Debt) * (Cost of Debt)*(1-Tax Rate)

Deposits

03 - Capital Structure & Cost of Capital

In this episode we explore annuities and perpetuities, and some of the differences between annuity due and ordinary annuity. We then talk about Capital budgeting and how NPV, IRR, and Payback Periods compare ——— Formulas—— NPV= Sum PV of inflows - Initial Cost ——- PV of perpetuity = C/r

02 - Perpetuities, Annuities & Capital Budgeting

Topics Covered: Time Value of Money - Inflation - Opportunity Cost - Compounding - Future Value and Present Value - Intrinsic Value TVM Equation : FV = PV (1+r/n)^t*n  where FV=Future Value; PV= Present Value; r=rate; t=time (years); n=compounding periods

Time Traveling - Time Value of Money and Cash Flows

An Easy-to-Digest Financial Learning Experience

hubhopper

Deposits

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