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FIN 201 · Unit 5 of 6

Financing the Firm

Corporate Finance

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Learning objectives

After completing this unit, you will be able to:

  • Apply frameworks from \
  • Apply the frameworks in "Financing the Firm" to a real management decision
  • Make progress on your Corporate Finance applied project applied project

Why this matters

Financing the Firm is essential to Corporate Finance. Lessons build fluency with anchor-company examples, worked problems, and assessments on the unit page.

Lesson

Unit overview

Complete all 5 lessons in order. Each lesson follows the program authoring standard: conceptual prose, worked examples, practice problems, and managerial judgment prompts. Finish unit exercises and the knowledge check before marking the unit complete.

Connection to applied work

This unit feeds directly into Corporate Finance applied project. As you read, capture notes, examples, and data you can reuse in that deliverable. Strong students finish each unit with a draft section of their project, not just highlights.

Practice

  1. Write a one-page summary of this unit in your own words without looking at the lesson.
  2. Find a real company example (public filing, news article, or personal experience) that illustrates the main concept.
  3. Draft one paragraph recommending an action a manager should take based on this unit.
  4. Add at least three terms from this unit to your course glossary.

Knowledge check

Answer these without notes before marking the unit complete:

  1. What is the central idea of "Financing the Firm"?
  2. What mistake do beginners most often make when applying this material?
  3. How does this unit help you complete Corporate Finance applied project?
  4. What is one decision you face this month where this unit applies?

Key takeaways

  • Apply frameworks from \
  • Business concepts only matter when they change a decision.
  • Your FIN 201 assessment (Time value of money, risk and return, capital budgeting, and corporate valuation.) rewards applied understanding, not memorization.

Unit assessment

Complete each section below. Score 80%+ on the quiz to finish this unit's assessment.

40% applied project35% knowledge checks25% reflections

Exercises

Apply what you learned in this unit with structured practice.

ExerciseApplied practice: Financing the Firm45 min
Complete a focused practice exercise on **Financing the Firm**. 1. Choose a real company, product, or situation you know. 2. Apply one core framework from this unit to analyze it. 3. Write your analysis in 300–500 words with a clear recommendation. 4. Cite at least one credible source.

Deliverable

300–500 word analysis document saved to your portfolio under FIN 201.

Rubric

  • • Framework applied correctly (not just named)
  • • Specific evidence from a real example
  • • Clear recommendation with tradeoffs acknowledged
  • • Professional writing with source citation
ExerciseDrill: Financing the Firm30 min
Work through the practice problems in the unit lesson without looking at notes. Then check your work against the lesson and write a short reflection: - What you got right - One mistake you caught - One concept to review before the next unit

Deliverable

Problem solutions + 150-word reflection in your FIN 201 workbook.

Rubric

  • • Attempted all practice items before checking answers
  • • Honest reflection on errors
  • • Identifies a specific review action

Model / spreadsheet

Build or extend a spreadsheet model tied to this unit.

ModelSpreadsheet model: Financing the Firm60 min
Build a spreadsheet model demonstrating **Financing the Firm**. **Requirements:** - Separate Input, Calculation, and Output sections - Label all units ($, %, units) - Include at least one sensitivity or scenario comparison - Add a balance check or reasonableness test Use Google Sheets or Excel. Link the model to your Corporate Finance applied project project where applicable.

Deliverable

Spreadsheet file with Inputs / Model / Outputs tabs · One-paragraph summary of key insight from the model · Screenshot or export saved to portfolio

Rubric

  • • Assumptions stated explicitly
  • • Logic is auditable (formulas or steps visible)
  • • Output answers a specific business question
  • • Sensitivity or scenario considered

Knowledge quiz

Check your understanding before marking the unit complete.

1. Summit blended pretax cost of debt 6.9%, tax 25%. After-tax cost closest to:

2. Summit WACC 8.29% equals 61.6%×10.25% + 38.4%×5.175%. This WACC discounts:

3. Summit net debt $180M, EBITDA $52M, covenant max 4.0x. Headroom before breach:

4. Pecking order predicts Summit needing $30M with low internal cash will likely:

5. Summit retains cash for growth; PE owners realize return mainly via:

6. Cutting DSO 3 days on $310M revenue frees cash approx:

7. Using book value weights in WACC is wrong because:

8. If cost of equity rises 100 bps with 62% equity weight, WACC rises roughly:

Next unit: Corporate Valuation and Decisions →