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CIMA F2 · Management Level

A. Financing capital projects

This section examines long-term financing decisions and capital structure, covering the sources of finance available to organisations, methods for calculating the cost of capital, and assessment of financing needs for sustainable growth and investment projects.

  • 7 lessons
  • 2 modules
  • 0.8h of video
  • ~15% of the exam
Start the first lesson → About the CIMA F2 course

What you'll learn

By the end of A. Financing capital projects.

  • Explain the types and sources of long-term funds available to organisations, including equity, debt, and hybrid financing instruments
  • Identify the advantages and disadvantages of different long-term financing sources in relation to organisational objectives
  • Calculate the cost of long-term funds using appropriate methods including the dividend growth model and capital asset pricing model
  • Analyse the weighted average cost of capital (WACC) and its application in investment appraisal decisions
  • Evaluate optimal capital structure decisions and their impact on organisational value and financing sustainability
  • Apply knowledge of long-term financing to assess financing needs and support sustainable growth strategies

The lessons

7 lessons, module by module.

Types and sources of long-term funds

3 lessons
  1. 1 Types and sources of long-term funds - part 1 12m
  2. 2 Types and sources of long-term funds - part 2 6m
  3. 3 Types and sources of long-term funds - part 3 6m

Cost of long-term funds

4 lessons
  1. 1 Cost of long-term funds - part 1 4m
  2. 2 Cost of long-term funds - part 2 5m
  3. 3 Cost of long-term funds - part 3 13m
  4. 4 Cost of long-term funds - part 4 5m

Questions

About A. Financing capital projects.

What does the Financing capital projects section cover?

This section covers long-term financing decisions and capital structure, examining the sources of finance available to organisations, methods for calculating the cost of capital, and how to assess financing needs for sustainable growth and investment projects. It addresses both the types of long-term funds organisations can access and the techniques used to determine the cost of these funds, enabling informed capital structure decisions.

Is this section important for the F2 exam?

Yes, this section is fundamental to the F2 exam. Capital financing and cost of capital calculations are core syllabus topics that feature regularly in objective test questions. Understanding long-term financing sources and cost of capital calculations is essential for tackling investment appraisal and financial decision-making questions throughout the F2 paper.

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