Capital Budgeting & Cost of Capital

This program provides an in-depth discussion of capital budgeting and cost of capital. Participants will learn how to create a sound capital budgeting and correctly calculate cost of capital that are needed for project finance. This program is suitable for professionals who aim to specialize and built a career in finance.

Certificate of completion (supplied by PasarTrainer)

Training Material

1. Time Value of Money
2. Present Value & Future Value of Lumpsum
3. Computing Present Value, Future Value, Time Period (tenor) and Interest Rate
4. Annuity: Concept and Practice
5. Perpetuity:Concept and Practice

This module explains the basic assumption of project evaluation by mastering the concept of time value of money and its implementation on a lumpsum pay, annuity and perpetuity schemes.

Capital Budgeting - Assumption

1. Cost of Equity
2. Required Rate of Return as Cost of Equity
3. Computing CoE with Dividend Growth Model (DGM)
4. Computing CoE with Capital Asset Pricing Model (CAPM)

This module explains the basic concept of Cost of Equity, as the component of Cost of Capital by using RRR, DGM and CAPM Formulas.

Cost of Capital - Cost of Equity

1. Yield-To-Maturity (YTM)
2. Present Value of Coupon Bond
3. Tax Shield
4. Computing Integrated Cost of Debt

This module explains the basic concept of Cost of Debt, as the component of Cost of Capital by Present Value of Lumpsum and Annuity, and comprehend the role of Tax in reducing the cost of debt.

Cost of Capital - Cost of Debt

A multiple-choice test to assess the participants' proficiency level prior to enrolling in the training program.

Pre-Test (30 Questions - Closed Book)

The participants are given an exercise to understand more deeply the cost of capital by computing CoE and CoD.

Case Study: Computing Cost of Equity and Cost of Debt

The participants are given an exercise to understand more deeply by computing PV, FV and Other Variables in lumpsum pay, annuity and perpetuity schemes.

Computing Present Value, Future Value, Discount Rate and Financing Period

1. Capital Structure Alternatives and Strategies
2. Computing Weighted-Average Cost of Capital (WACC)
3. Modigliani - Miller Proposition I
4. Modigliani - Miller Proposition II
5. Modigliani - Miller Proposition with Taxes
6. Comparing WACC to IRR

This module explains the concept of WACC and Capital Structure Strategies through MM Pro I, II and with Taxes. The participants also are invited to evaluate the project's eligibility by comparing WACC and its IRR.

Weighted-Average Cost of Capital (WACC)

1. Payback Period
2. Adjusted Payback Period
3. Net Present Value
4. Profitability Index 
5. Internal Rate of Return (IRR)

This module explains the tools in project evaluation analysis commonly used in business to determine wheter a project is eligible from perspective of the time value of  money.

Tools and Analysis

A multiple-choice test to assess the participants' proficiency level after enrolling in the training program.

Post-Test (30 Questions - Closed Book)

1. Computing Project's Payback Period
2. Computing Project's Adjusted Payback Period
3. Computing Project's Net Present Value
4. Computing Project's Profitability Index 
5. Computing Project's Internal Rate of Return (IRR)

The participants are taken into practice to evaluate the eligibility of the projects by using available tools.

Project Evaluation Cases and Exercise

The participants are given an exercise to understand more deeply the Ideal Capital Structure by computing WACC.