6 Steps to Score 70% In CFA Corporate Finance

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6 Steps to Score 70%+ In CFA Corporate Finance who have worked in the area of investment
6 banking and private equity.
No vember 21st, 20 12 Co mments ( 0 )
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Dear CFA Level – I Candidate, so far, we have seen the Commandments and Sins of Fixed Income and email id Subscribe
Economics. I’m sure they have helped you while solving your mock exams.
1. In this session, we will take a look at the Commandments and Sins of Corporate Finance.
FREE 10 days Se e
2. If we are asked to choose 1 project among 2 where the decision based on NPV and IRR conflicts, chose CFA trial course D e t ails
the project that has the higher NPV.
3. The decision to take a project based on Profitability Index is that PI>1.
4. While calculating the cost of capital, remember to always consider the after tax cost of debt.
5. Treatment of Flotation Costs – Adjust them to the initial project cost.
6. Country Risk Premium = Sovereign Yield Spread * (std dev Equity Index of Developing Country/std dev
Sovereign Bond in terms of the developed market currency)
The revised CAPM formula:
Cost of Equity = Rf + B(E(Rm)- Rf + CRP)
We hope that the above points were useful for your preparation. We will send you such useful information
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