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QuantFinance foundations

Corporate finance

Time value of money, capital budgeting, capital structure, the cost of capital and real options.

1 lesson open · 9 planned

Step 1 is part of the option pricing path, a 22-step course from discounting to Black–Scholes.

Pages you can open

Compounding and discounting Is $1,000 in ten years worth more than $600 today? Option pricing path, step 1 · ~30 min

Planned

In learning order. These are not pages yet.

  1. Why an annuity is a sum of discounted paymentsIntro
  2. How loan payments split into interest and principalIntro
  3. Why NPV and IRR can rank projects differentlyIntro
  4. Which cash flows belong in a capital budgeting decision?Intro
  5. Why leverage does not create value in the MM modelAdvanced undergrad
  6. How APV separates project value from financing effectsAdvanced undergrad
  7. Why waiting can make an investment more valuableAdvanced undergrad
  8. When is WACC the right discount rate?Advanced undergrad
  9. Why there is an optimal amount of debt: the trade-off theoryAdvanced undergrad

How it connects

Builds on Calculus Real analysis Numerical methods Equities and portfolios Probability Derivatives

Leads to Derivatives Bonds and interest rates Credit risk Equities and portfolios

Subjects marked “connection” are linked by a related idea, not by a prerequisite.

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