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Unit 1

In this unit we will cover x, y, z

Do you remember those finance text books of 1,000 pages? Well, they have many pages that are devoted to the cost of capital. No doubt many PhDs have thrived on it also. One of the problems is that this subject is inexorably linked to the Financing Decision, but we will try to separate the two; otherwise the study becomes much too unwieldy.
In this Module we will study the cost of capital in the context of finding a practical way to determine a discount rate that we can use for investment appraisal (and we will learn something about the valuation of securities along the way). Since there are many theories (particularly on the cost of equity) there is no single approach that we can use that will allow us to state with certainty that we know the cost of capital. We can however, learn the various methods and apply them in situations presented to us by the examiner.

 

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