-
Present Values 3
-
IntroductionLecture1.1
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SolutionsLecture1.2
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List Comprehension ReviewLecture1.3
-
-
NPV vs. IRR 4
-
IntroductionLecture2.1
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The Functions Part 1Lecture2.2
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The Functions Part 2Lecture2.3
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Testing NPV vs. IRRLecture2.4
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Other Profit Measures 4
-
IntroductionLecture3.1
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Measures Part 1Lecture3.2
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Measures Part 2Lecture3.3
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Investment TimingLecture3.4
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-
Depreciation 4
-
IntroductionLecture4.1
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The Basic ProblemLecture4.2
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Creating the Depreciation EquationLecture4.3
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The Tax ShieldLecture4.4
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Cash Flow Challenges 9
-
IntroductionLecture5.1
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Total Cash FlowsLecture5.2
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Solution 1Lecture5.3
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Solution 2Lecture5.4
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Solution 3Lecture5.5
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Solution 4Lecture5.6
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Solution 5Lecture5.7
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Solution 6Lecture5.8
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Solution 7Lecture5.9
-
-
Capital Asset Pricing Model 3
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IntroductionLecture6.1
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The EquationLecture6.2
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Graphing CAPMLecture6.3
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Risky Debt 3
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IntroductionLecture7.1
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Adjusting Debt for RiskLecture7.2
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SolutionLecture7.3
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Unlevering Equity 3
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IntroductionLecture8.1
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The r for EquityLecture8.2
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Including TaxesLecture8.3
-
-
Weighted Average Cost of Capital 4
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IntroductionLecture9.1
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The EquationLecture9.2
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TaxesLecture9.3
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SolutionLecture9.4
-
-
Debt Effect Analysis 2
-
IntroductionLecture10.1
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The Effect of Debt on EquityLecture10.2
-
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WACC Challenge 2
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IntroductionLecture11.1
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SolutionLecture11.2
-
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Relative Valuation 4
-
IntroductionLecture12.1
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Financial ConceptLecture12.2
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Solving Systems of EquationsLecture12.3
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ArbitrageLecture12.4
-
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Forward Contract Valuation 3
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IntroductionLecture13.1
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Forward Contract BasicsLecture13.2
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Forward ContractsLecture13.3
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The Equation
A quick refresh on what the equation is for the weighted average cost of capital:
Equation
r
a
= r
e
* E/(D+E) + r
d
* D/(D+E)
a
= r
e
* E/(D+E) + r
d
* D/(D+E)
r
a
= Return on Assets
r
e
= Return on Equity
r
d
= Return on Debt
E = Equity Value
D = Debt Value
When we use this, we would take our debt yield as the rate of debt, and then our unlevered equity rate that we found before for the rate of equity. This equity rate is likely the average of a few similar companies’ unlevered equity rates.
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Introduction
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Taxes