Why do we include cost of equity in WACC ?

Hi, I have one question that is bothering me.

When a Company issues shares ie. USD 100 m.and gets money from IPO all this money goes to Shareholder’s Capital in the Balance Sheet.

And from now on the Company doesn’t have to pay anything to investors who bought its shares. So the cost of equity is not a real cost as opposed to cost of debt which is a real cost, meaning the Company has to pay interest and repay principal.  

So why do we include cost of equity in WACC in DCF models?

Test to know if you have what it takes to study for CFA

Hi all - This question is more directed to charterholders or people who have a good experience with the curriculum, 

A friend is considering starting the CFA program. He asked me to tell him  if he has what it takes. 

I consider a big factor to answer that question is to check how comfortable he is with logic and quantitative questions: Would you know any test that can give a reasonnable assessment of somebody’s quantitative and logic skills in the perspective of studying for CFA?

Name of bald guy that did DCF videos (Level I material)

Hard to keep a straight face while asking but this is a serious question. 

Many years ago there was a video series that was either CFA specific or just financial concepts that are part of Level 1.

The guy doing the discounted cash flow videos had a shaved head, glasses and wrote on a large pieces of posterboard with a dry erase marker and the video was taken from above when he was writing.

Does anyone have any idea who I am talking about or remember the name or firm that made the videos? 


IT Engineer, MBA in Finance, looking to opt for CFA Level II

Dear All,

I am currently pursuing MBA in Finance. I cleared CFA Level I in June 2015 examination post which I got recruited by one of the Big 4’s as a Technology Consultant. I have 2 years of work experience with IT MNC and Bachelors of Engineering in Information Technology.

I was contemplating on whether to continue with CFA Level II examination in June 2016.

Request your comments on the same.

Any help is appreciated. Cheers!

CFP after CFA?

My boss just said out load that CFA is  a sh*** program, I am not going to get into discussing that. He is big on CFP, maybe he is a CFP himself. He thinks I should do CFP even though I am a CFA charterholder.

I dont plan on staying with this firm, but is there much gain out of doing CFP after CFA,  a lot of us are into CFA so our opinions are biased. Maybe someone who has done both or knows the market rep of both? Is the CFP realy more difficult?

Passed Level III last year, never applied for Charter

I passed Level III in 2014, have all the relevant work experience, but have not yet applied for the charter.  My (small) company will not pay for the annual dues or other society memberships so I’ve just not applied.  The charter will not help me at my current job, but I pursued it anyways just in case things didn’t work out here.  Is anyone aware of a scenario in which waiting too long to apply for the charter will keep me from getting approved?  Thanks!


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