Finance

Design the financing structure

When a growth investment needs funding, compute the cost of capital, then build a structure that holds using the WACC, the tax shield, the debt level and the signal the choice sends.

3 steps · 12 lessons · ≈10 hours

Design the financing structure route graphic

Your learning route

The program order

Complete the programs in order to finish the route. Each one brings short lessons, applied practice and a realistic business case together.

Plus and Pro members can create a verifiable Stratify certificate when the route is complete.

  1. Program 01

    Calculate the cost of capital

    Foundational: separate the cost of capital from the price your treasurer pays for money, and read it as the return investors could earn on a fairly priced alternative at the same risk. By the end of this program you can split time value from the risk premium, work through the CAPM's security market line, build a weighted average of the costs of debt and equity on market weights, and say whether a rate belongs against pretax or after-tax cash flows.

    • What the cost of capital is

    Apply it: Closing case: defend the discount rate

    4 lessons · ≈3 hours

  2. Program 02

    Defend the investment hurdle with the WACC

    Intermediate: estimate market-value weights, an after-tax cost of debt and a cost of equity built on a beta that matches the target debt ratio, then combine them into one hurdle rate. By the end of this program you can compute a WACC from a company's own market data, unlever and re-lever an equity beta when the target capital structure changes, and state the assumptions and the limits that travel with the rate you put in front of a committee.

    • Weight by market value

    Apply it: Closing case: defend the hurdle rate

    4 lessons · ≈3 hours

  3. Program 03

    Choosing financing with capital structure theory

    Advanced: work through what Modigliani and Miller establish about the financing mix, then what each relaxed condition adds to the decision: the interest tax shield, the costs of financial distress, agency costs, and the information gap behind pecking-order financing and signaling. By the end of this program you can price a tax shield for the right horizon, set it against expected distress costs, read what a debt or equity announcement tells the market, and defend a capital structure that leaves room to move.

    • How debt financing reallocates risk

    Apply it: Closing case: steer the financing committee

    4 lessons · ≈4 hours