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Weighted average cost

Unit 6: Cost of CapitalTopic 3 of 3
Browse the Fundamentals of Financial Management syllabus

Fundamentals of Financial Management

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What the syllabus expects

  • WACC
  • Factors affecting WACC

Weighted average cost

Bachelor of Business Studies (BBS) — Second Year

Subject: Fundamentals of Financial Management (MGT 215)

Unit 6: Cost of Capital

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

  • Explain the scope and key elements of weighted average cost.
  • Apply the relevant financial model, calculation or analytical approach and explain its assumptions and decision implications.

Curriculum Scope

  • WACC
  • Factors affecting WACC

Detailed Microsyllabus

  1. WACC calculation

    1. Identify capital components and suitable weights.
    2. Combine component costs consistently.
    3. Market versus book weights as specified.

  2. WACC determinants

    1. Financing mix, risk and market conditions.
    2. Tax and issuance assumptions.
    3. Interpret how changes affect the composite cost.

Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 41-43.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here.