347 647 9001+1 714 797 8196Request a Call
Call Me

6 Steps to Score 70%+ In CFA Corporate Finance

November 21, 2012
, , ,
Corporate Finance CFA level 1

Dear CFA Level I Candidate, so far, we have seen the Commandments and Sins of Fixed Income and Economics. I am sure they have helped you while solving your mock exams.

  1. In this session, we will take a look at the Commandments and Sins of Corporate Finance.
  2. If we are asked to choose 1 project among 2 where the decision based on NPV and IRR conflicts, chose the project that has the higher NPV.
  3. The decision to take a project based on Profitability Index is that PI>1.
  4. While calculating the cost of capital, remember to always consider the after tax cost of debt.
  5. Treatment of Flotation Costs - Adjust them to the initial project cost.
  6. Country Risk Premium = Sovereign Yield Spread * (std dev Equity Index of Developing Country/std dev Sovereign Bond in terms of the developed market currency)

The revised CAPM formula:

Cost of Equity = Rf + B(E(Rm)-Rf + CRP)

We hope that the above points were useful for your preparation. We will send you such useful information before the exam. If you want to know about a particular topic please write to us at

You can get some useful downloads for your CFA exams. You can also buy some recordings for the topic of your choice on our course page.

If you want to see what questions others are asking then please visit our forum.

Please feel free to write to us for any help regarding your CFA exams.


About the Author

Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, it is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, and Operational Risk Modeling. EduPristine has conducted more than 500,000 man-hours of quality training in finance.


Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to and we will rectify it.

Popular Blogs: Whatsapp Revenue Model | CFA vs CPA | CMA vs CPA | ACCA vs CPA | CFA vs FRM

Post ID = 21887