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For the November 2023 CFA Level II exam, we do not have Capital Budgeting and Capital Structure in the pdf. I believe it was covered in brief in Level 1. So would you advise that we go through the videos regarding the same regardless?
R/E as a way of saying using cash instead of distributing it. If your rate of return with own financing (your cash) is lower than the cost of (external) capital, then your EPS will increase is you use internally generated cash (from prior earnings which are now retained) rather than looking for external (more expensive) capital. Basically, the earnings you get from each internal dollar is lower than the cost you would have if you wanted to use external capital to repurchase you stock.
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Great! Hopefully, there will be such videos for level 3.
Thank you for your great effort, clear explanation and a wonderful well prepared slides .
Glad it was helpful! If you like our video lessons, it would be helpful if you could take 2 minutes of your time to leave us a review here: www.trustpilot.com/review/analystprep.com
3
1.
2.Constant Dividend policy
3. Effects of repurchase on EPS
Prof, Im going to binge Seinfeld to understand all your references 😂
Good explnanation
For the November 2023 CFA Level II exam, we do not have Capital Budgeting and Capital Structure in the pdf. I believe it was covered in brief in Level 1. So would you advise that we go through the videos regarding the same regardless?
52:26 I did not get it
same. I dont get the internal fiancing part. Anyone care to explain?
R/E as a way of saying using cash instead of distributing it. If your rate of return with own financing (your cash) is lower than the cost of (external) capital, then your EPS will increase is you use internally generated cash (from prior earnings which are now retained) rather than looking for external (more expensive) capital.
Basically, the earnings you get from each internal dollar is lower than the cost you would have if you wanted to use external capital to repurchase you stock.