Cost of Capital and WACC Fundamentals

How do businesses decide if a new project or investment is worth the financial risk? It all starts with understanding the cost of capital—the minimum return a company must earn to satisfy its investors and creditors. This text-based course guides you through the foundational concepts of corporate finance. You will transition from understanding basic interest rates to confidently calculating how much it costs a company to raise funds from various sources. What you'll learn: Understand the core principles of capital structure and why the cost of capital matters; Calculate the cost of debt for both debentures and bank loans, including tax shield adjustments; Determine the cost of preference shares using standard financial formulas; Estimate the cost of equity using dividend valuation and modern capital asset pricing models; Compute the Weighted Average Cost of Capital (WACC) to evaluate overall corporate investment viability; Apply these calculations to real-world business scenarios using structured, step-by-step written exercises. You will begin by learning key financial terminology and foundational definitions before moving step-by-step through debt, preference shares, equity, and finally assembling them into a complete WACC analysis. This course is designed for beginners, business students, and aspiring finance professionals. No prior financial modeling experience is required. Start building your corporate finance foundation today.