I paid for MM course just because a colleague recommended but I find your lectures far more easy to understand. I will definitely be signing up for L2 for IFT course. Thank you for the videos.
@IFT Thankyou for such great videos. Just to want to notify you that at 15:11, In the curriculum, flotation cost adjusted in the price of equity shares and coming up with a higher cost of equity is considered as a wrong method because this higher rate will discount all the future cash flows at a higher rate which is inappropriate. Rather what curriculum suggest is to deduct the flotation cost from the NPV of the project calculated on the normal discount rate. Please correct this.
Thank you so much for your videos! I am trying to finish all these within 2 weeks. Cannot waste too much time on reading, and I found your channel! I subscribed with many thanks!
Thank you sir for the lecture. IFT have amazing well arranged video they have helped me big in my journey I do know what I could do without you. Its absolutely excellent I would rate maximum if I had to it
Dear IFT fan & follower. Thank you for your kind words. We are really pleased that you are able to benefit from IFT RUclips videos. Be sure to Like the videos; share IFT videos within your social media circles; Like the IFT FB page (facebook.com/CFA.Trainer). Please also join Analystforum.com where we will be most grateful if you can show your status as “Studying with IFT”. Thank you! - IFT Support Team
Thank you for the great video. Still don't understand why the cost of new debt/equity would change altogether at breakpoints. In real world shouldn't they change in brackets, i.e., only the amount of equity exceeding the breakpoints would be charged/required at higher cost?
There the amount of capital refers to amount of additional capital raised. E.g. if 20 mn additional capital is raised then we would apply new higher cost on additional amount. IFT Support Team
Sir! you said that we should increase the project's cash outflow by the floatation cost, but in your example you deducted floatation cost from the denominator (i.e the current stock value).please help me out.
Dear Avinsah, We are subtracting the flotation costs from the issue price, which is the same as increasing the project's initial outflow, since the flotation cost is paid upfront. IFT Support Team
@@IFT-CFASir i just want to notify you that the method used by you is considered wrong in the curriculum. According to the CFA Institute, the correct method is to adjust the floatation costs in the initial cash outflow. Please make sure you make the changes in the video. Thank you.
Your videos are really helping me out in better understanding. I am having issues in solving Ex13, can you please explain the whole solution. Thank You.
you need to calculate beta at different levels of D/E as follows: Then calculate cost of debt and cost of equity, i.e. Cost of equity = Rf + Beta * ERP Cost of debt = LIBOR + spread Using cost of debt and equity, calculate WACC. IFT support team
Sir, I had some trouble understanding the phrase spreads over LIBOR. What does it mean? I would really appreciate some assistance with the same. Regards
How to succeed in the CFA Program? Want to see tips and stories from successful CFA candidates? Visit: ift.world/success-stories/
I paid for MM course just because a colleague recommended but I find your lectures far more easy to understand. I will definitely be signing up for L2 for IFT course. Thank you for the videos.
@IFT Thankyou for such great videos. Just to want to notify you that at 15:11, In the curriculum, flotation cost adjusted in the price of equity shares and coming up with a higher cost of equity is considered as a wrong method because this higher rate will discount all the future cash flows at a higher rate which is inappropriate. Rather what curriculum suggest is to deduct the flotation cost from the NPV of the project calculated on the normal discount rate. Please correct this.
Exactly bro
And how exactly would u calculate the npv from the data given?
There s a reason y u haven't been responded to.
@@citymorguem5467 we just have to add the floatation cost to the initial investment and calculate the NPV with the amount we get.
Thank you so much for your videos! I am trying to finish all these within 2 weeks. Cannot waste too much time on reading, and I found your channel! I subscribed with many thanks!
Thanks a lot for your wonderful comments and for appreciating IFT videos.
IFT support team
Thank you sir for the lecture. IFT have amazing well arranged video they have helped me big in my journey I do know what I could do without you. Its absolutely excellent I would rate maximum if I had to it
Dear IFT fan & follower. Thank you for your kind words. We are really pleased that you are able to benefit from IFT RUclips videos. Be sure to Like the videos; share IFT videos within your social media circles; Like the IFT FB page (facebook.com/CFA.Trainer). Please also join Analystforum.com where we will be most grateful if you can show your status as “Studying with IFT”. Thank you! - IFT Support Team
The best lectures. Thank you!
Thank you for the great video. Still don't understand why the cost of new debt/equity would change altogether at breakpoints. In real world shouldn't they change in brackets, i.e., only the amount of equity exceeding the breakpoints would be charged/required at higher cost?
There the amount of capital refers to amount of additional capital raised. E.g. if 20 mn additional capital is raised then we would apply new higher cost on additional amount.
IFT Support Team
Thank you 🙏
Thank you so much for helping us
Sir! you said that we should increase the project's cash outflow by the floatation cost, but in your example you deducted floatation cost from the denominator (i.e the current stock value).please help me out.
Dear Avinsah,
We are subtracting the flotation costs from the issue price, which is the same as increasing the project's initial outflow, since the flotation cost is paid upfront.
IFT Support Team
@@IFT-CFASir i just want to notify you that the method used by you is considered wrong in the curriculum. According to the CFA Institute, the correct method is to adjust the floatation costs in the initial cash outflow. Please make sure you make the changes in the video. Thank you.
Your videos are really helping me out in better understanding. I am having issues in solving Ex13, can you please explain the whole solution.
Thank You.
you need to calculate beta at different levels of D/E as follows:
Then calculate cost of debt and cost of equity, i.e.
Cost of equity = Rf + Beta * ERP
Cost of debt = LIBOR + spread
Using cost of debt and equity, calculate WACC.
IFT support team
in ex 4.3, why the weightage of capture structure does not include the perferred price?
What do you mean by preferred price. Please elaborate your query.
IFT Support Team
At 5:40 if company raise 15 million and if company can raise 60% of equity then why you havent pick 20% so what calculation of 60% of 15 >=9 ....
Sir,
I had some trouble understanding the phrase spreads over LIBOR. What does it mean?
I would really appreciate some assistance with the same.
Regards
It means Libor rate plus a premium.
IFT Support Team
why isnt the cost of debt multiplied by (1-T)?
It says it's after tax cost of debt
The cost of debt is not multiplied by (1-T)? because it is already stated as “after tax”. IFT Support Team
Where in the example it is mentioned that it's after tax?
@@saumyashukla5642 2.54 in the table
@@Alice-gl6um It is not mentioned as such in example no. 13
@ift where i find questions
curriculum and candidate resources