18. Valuation

Frugal Finance offers a series of courses designed to improve your understanding of critical financial ideas. These courses cover topics ranging from risk assessment to project evaluation, providing real-world details into financial decision-making.

One course examines whether small private general contractors in the construction industry contribute value to their businesses by analyzing financial metrics and industry averages. It discusses borrowing risk, default risk, bond ratings, and interest rates to help contractors improve the value of their enterprises.

Risk-free Rate

Another course looks at the ideas of risk-free rate, risk premium, and betas in financial models for risk and return. It explains real-world procedures for estimating risk premiums and factors influencing betas, such as industry exposure and financial leverage.

Bottom-up Betas

A course focusing on bottom-up betas offers an alternative approach for determining betas without relying on historical price data. It dissects betas into business, operating leverage, and financial leverage components, providing details into estimating betas effectively.

Cost of Equity

Estimating the cost of equity is crucial for both investors and company managers/owners. This course explains procedures like the Capital Asset Pricing Model (CAPM) to calculate the estimated return from investing in a company’s equity based on factors like the risk-free rate and beta.

Cost of Capital

Calculating the costs of capital involves understanding the cost of debt and equity. This course looks at procedures for estimating default risk and default spread for firms, including those without credit ratings, and discusses the importance of determining the proportions of debt and equity components.

Measuring return on investments (ROI) is critical in various business contexts. This course addresses determining hurdle rates for projects and the transition from accounting earnings to cash flows, helping students effectively evaluate project ROI.

Finally, a course covers critical financial metrics and decision-making tools like Return on Capital, Return on Equity, Net Present Value (NPV), and Internal Rate of Return (IRR). Using real-world examples and calculations, students can assess project profitability and make informed investment decisions.

These courses provide an all-inclusive understanding of financial ideas and equip students with real-world skills for financial decision-making in various business scenarios.