Long-term financial decisions should be based on the question if investing (in a new project or asset), will provide the required rate of return.

The cost of capital provides such an answer and it plays a key role in financial decision-making across the organisation and is used in project appraisals, project finance, company valuation, mergers and acquisitions etc.

At its basic level, the formula of the weighted average cost of capital is easy to understand, though in reality the theory behind it, is fraught with problems. This course will take you through the key theories and concepts and challenges these concepts when estimating the cost of debt and the cost of equity.

You will learn about 

• The key theories used for calculating the cost of debt and the cost of equity
• The hurdle rate versus WACC
• Learn why managers change the cost of capital in practice
• How to select market and book values
• Gordons growth model
• The Capital Asset Pricing model
• The market risk premium
• Using Beta as a company's risk benchmark versus the market
• Credit risk and ratings
• The effects on capital expenditure projects
•  International considerations
• How to apply the theories in more or less efficient markets
•  How to challenge conventional theory, when the risk-free rate, beta and equity risk premium are not available or have diverted from their norm
• Understand the relationship between gearing and the cost of capital

Recommended background

The course is designed for all professionals involved in long-term planning, using, in need to calculate or to challenge the weighted average cost of capital. Understand its role and application as a discount factor or the effects on the capital structure. You could be working for a consulting firm, a public or private company, a family business, a bank or a private equity firm.

Course format

This course will be taught using a combination of formal instructions, combined with practical and interactive exercises to reinforce the concepts taught in each section of the course.

Practice-based learning and critical engagement is a key theme through all our courses allowing delegates to acquire the needed skills and techniques to be applied as soon as they are learned and developed.

• Very good course, teacher, and approach. Material available on-line prior the course + request to the participants about their expectations from the course.
• A pleasant and knowledgeable instructor with a lot of interaction among participants.
• Congratulations! Very well done. Nothing more to add.
• I really appreciated the empathy and skills of the lecturer Bruno Bosch. Also, the size of the group (7 persons) was perfect to have the necessary interactivity throughout the course.