Corporate Issuers

CFA Level I — Exam Weight: 6-9%

7

Modules

39

Concepts

14

Formulas

21

Quiz Questions

Modules in Corporate Issuers

7 learning modules covering 6-9% of the CFA Level I exam.

1

Organizational Forms, Corporate Issuer Features, and Ownership

6 concepts 3 questions
2

Investors and Other Stakeholders

5 concepts 3 questions
3

Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits

5 concepts 2 questions
4

Working Capital and Liquidity

5 concepts 6 formulas 3 questions
5

Capital Investments and Capital Allocation

6 concepts 4 formulas 4 questions
6

Capital Structure

6 concepts 4 formulas 4 questions
7

Business Models

6 concepts 2 questions

Key Formulas

9 essential formulas for Corporate Issuers.

NPV

NPV = Σ[CFₜ / (1+r)ᵗ] - Initial Investment

Accept if NPV > 0

IRR

Rate where NPV = 0

Accept if IRR > required return

Payback Period

Time to recover initial investment

Ignores TVM and post-payback CFs

WACC

WACC = w_d × r_d(1-t) + w_e × r_e

After-tax weighted average cost

Cost of Equity (CAPM)

r_e = Rᶠ + β(R_m - Rᶠ)

Risk-free + equity risk premium

DOL

DOL = %ΔOI / %ΔREV = (Rev - VC) / (Rev - VC - FC)

Operating leverage sensitivity

DFL

DFL = %ΔEPS / %ΔOI = OI / (OI - Interest)

Financial leverage sensitivity

DTL

DTL = DOL × DFL

Total leverage effect

Breakeven

Q = FC / (P - VC)

Units to cover fixed costs

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