Corporate Finance: Study Session 8
Study Session Materials
Complete List of CFA Program Readings
Topic Overview
Corporate Finance
This study session first presents capital budgeting analysis, focusing on the applications of concepts in the corporate finance decision-making process. These capital budgeting principles are critical for an analyst inside the firm preparing capital budgeting recommendations as well as for an external analyst estimating the value of the firm.
The second half of the study session covers capital structure and
dividend policy. Included is a discussion of the Modigliani-Miller
propositions relating to capital structure and dividend policy. The
presentation of capital structure and dividend policy starts with the
classic Modigliani-Miller propositions, and then relaxes their underlying
assumptions by incorporating taxes and other market imperfections.
Leverage and dividend policy help determine the risk and return
characteristics of corporate stocks and bonds.
View learning outcome statements (LOS) for reading objectives.
Complete List of CFA Program Readings
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Members may download these designated readings. Log in for access. |
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“Capital Budgeting” John Stowe and Jacques R. Gagne (CFA Institute, 2005) Member download (PDF) |
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View LOS |
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"Capital Structure and Leverage" Raj Aggarwal, Cynthia Harrington, Adam Kobor, and Pamela P. Peterson (CFA Institute, 2005) |
View LOS | |
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"Dividends and Dividend Policy" George H. Troughton and Catherine E. Clark (CFA Institute, 2005) |
View LOS |