Corporate Finance Topics We Cover
- Time value of money: present and future value, annuities, perpetuities and loan schedules.
- Capital budgeting: NPV, IRR, payback, profitability index, incremental cash flows and sensitivity analysis.
- Cost of capital: cost of equity using CAPM and dividend growth models, cost of debt and WACC.
- Valuation: discounted cash flow, dividend discount models and relative valuation using multiples.
- Bond and share valuation.
- Risk and return: diversification, beta and portfolio theory.
- Capital structure: Modigliani-Miller, trade-off and pecking order theories, and leverage.
- Dividend policy, mergers and acquisitions, and working capital management.
- Derivatives and risk management at an introductory level.
Capital Budgeting Done Properly
Capital budgeting questions test whether you can identify the right cash flows. Your expert includes initial investment, operating cash flows after tax, changes in working capital, depreciation tax shields and terminal value, and excludes sunk costs and financing costs. The NPV is calculated at the appropriate discount rate, and sensitivity or scenario analysis shows how the decision changes if key assumptions move.
Calculating the Cost of Capital
WACC questions involve several steps: estimating the cost of equity, often with CAPM, estimating the after-tax cost of debt and weighting each by market values. Your expert explains each input, such as the risk-free rate, beta and market risk premium, and where reasonable figures come from. For Australian examples, they may refer to government bond yields and the cash rate from the Reserve Bank of Australia, and Australia's dividend imputation system, which can affect the cost of equity. For UK examples, they use gilt yields and the Bank of England Bank Rate. Your expert explains these effects where your course covers them.
Company Valuation
Valuation assignments often use a real listed company. Your expert gathers data from annual reports and ASX or London Stock Exchange announcements, forecasts free cash flows with stated assumptions, discounts them at the WACC, calculates a terminal value and compares the result with the market price and with valuation multiples of comparable companies. Assumptions are tested and explained, because the quality of a valuation depends on them.
Spreadsheets You Can Follow
Finance work is usually done in Excel. Your expert builds models with inputs separated from calculations, formulas visible and outputs clearly labelled, so you can trace every figure and test your own assumptions. Functions such as NPV, IRR, PMT and XNPV are used correctly, with notes on common pitfalls such as the timing of the first cash flow.
Interpreting the Results
A number on its own rarely answers the question. Your expert explains whether a project should proceed, what the valuation implies about the share price or how a change in capital structure would affect risk and return, and notes the limitations of the method used.
Finance Theory Essays
Some tasks ask you to evaluate theory, such as the efficient market hypothesis, capital structure theories or behavioural finance. Your expert builds a clear argument using academic research and real-world evidence.
Common Mistakes
- Including sunk costs or interest payments in project cash flows.
- Using book values instead of market values for WACC weights.
- Mixing nominal and real rates.
- Getting the timing of cash flows wrong in Excel.
- Reporting results without interpreting them.
Working Capital Management
Not every finance question is about long-term investment. Working capital tasks ask how a business manages cash, receivables, inventory and payables day to day. Your expert calculates measures such as the cash conversion cycle, explains the trade-off between liquidity and profitability and recommends practical improvements, such as changing credit terms or inventory levels.
Using the Model Answer
Change an assumption in the spreadsheet and see how the result moves. That is one of the best ways to understand finance. Please use our work as a learning resource, in line with our fair use policy.
Price and Timeline
Problem sets can be ready within one to two days, and valuation reports within four to six. Send your task for a fixed price within 30 minutes.
Choosing Between NPV and IRR
Students often ask why textbooks prefer NPV when IRR seems easier to explain. The answer is that IRR can mislead in some situations: projects with unusual cash flow patterns may have more than one IRR, and when comparing mutually exclusive projects of different sizes, the project with the higher IRR is not always the one that adds more value. Your expert explains these issues with simple numerical examples where your question touches on them, and shows why NPV remains the most reliable guide to shareholder value. This kind of explanation is useful for exam preparation as well as assignments.