Cost of Capital: Valuation of Stocks and Bonds

Every major business decision relies on understanding how much it costs to raise money. Knowing how to value stocks and bonds and calculate the cost of capital is essential for evaluating corporate projects and investment opportunities. This text-only course guides you through the core principles of corporate finance. You will transition from understanding basic financial assets to confidently calculating the weighted average cost of capital (WACC) and assessing investment viability. Learn to: Understand the foundational concepts of debt, equity, and financial markets; Calculate the value of bonds using interest rates and cash flow discounting; Evaluate stock value using dividend discount models and modern market multiples; Determine the cost of debt and the cost of equity for any business; Compute the Weighted Average Cost of Capital (WACC) to assess project feasibility; Analyze how modern market factors and risk profiles influence capital costs. The course starts with essential terminology and the time value of money before moving step-by-step through bond pricing, stock valuation formulas, and capital structure calculations. You will practice these concepts through written scenarios and structured financial exercises. Designed for beginners in finance, business owners, and aspiring analysts, this course requires no prior background in corporate finance. Start reading today to build a strong foundation in corporate financial analysis.