Uploaded February 2025 | Updated September 2026, 1 week ago
In this session, we completed our discussion of the cost of capital, by talking about the ingredients that go into the cost of debt and the weights to use on debt and equity in capital. We then took a big picture perspective of free cash flows, before beginning on earnings, starting with an examination of how best to update earnings and correct them for the mistreatment of some financial expenses as operating expenses (leases were the biggest, but accounting has come to its senses) and R&D (yet to come, for next class).
Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/DebtCost.pdf
Slides: nyu.box.com/s/78d95svdz3v0rbkvm2457sxdex2j1viw
Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session8Btest.pdf
Post class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session8Bsoln.pdf
In this session, we completed our discussion of the cost of capital, by talking about the ingredients that go into the cost of debt and the weights to use on debt and equity in capital. We then took a big picture perspective of free cash flows, before beginning on earnings, starting with an examination of how best to update earnings and correct them for the mistreatment of some financial expenses as operating expenses (leases were the biggest, but accounting has come to its senses) and R&D (yet to come, for next class).
Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/DebtCost.pdf
Slides: nyu.box.com/s/78d95svdz3v0rbkvm2457sxdex2j1viw
Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session8Btest.pdf
Post class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session8Bsoln.pdf
