Page 131 - AFM Integrated Workbook STUDENT S18-J19

Chapter 7

Risk adjusted WACC and adjusted

present value

Outcome

By the end of this session you should be able to:

 calculate and evaluate project specific cost of equity and cost of capital,
including their impact on the overall cost of capital of an organisation,

 demonstrate detailed knowledge of business and financial risk, the capital asset
pricing model and the relationship between equity and asset betas,

 apply the adjusted present value technique to the appraisal of investment
decisions that entail significant alterations in the financial structure of the
organisation,

and answer questions relating to these areas.

The underpinning detail for this Chapter in your Integrated Workbook can
be found in Chapter 7 of your Study Text

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