Cost of Capital and Valuation
| Section | Name | Description |
|---|---|---|
| 1. Introduction | ||
| 2. Financial Leverage and the Cost of Capital | These notes summarize some basic ideas that help us understand the relation between financial leverage and the cost of capital. |
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| 3. Free Cash Flow Capitalization Approaches: Conceptual Framework | We have reviewed the notions of the cost of debt, the cost of equity, and the cost of the firm's overall capital. In this section, we learn how we can apply these costs to discount the firm's future cash flows. |
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| 4. Estimating the WACC for Listed Firms | So far, we have seen what the WACC is and how we use it in firm valuation. This section takes a brief look at how to estimate the WACC in practice. |
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| 5. Estimating the WACC in Specific Valuation Situations | So far, we have seen what the WACC is and how we use it in firm valuation. This section takes a brief look at how to estimate the WACC in practice. |
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| 6. The Cost of Capital from International Comparable Firms | This section briefly illustrates how to estimate the cost of capital using international comparable companies. |
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| Appendix: Unlevering and Relevering | ||