IFoA CB1 study plan

Explain how a firm's capital structure decision affects its cost of capital, using the Modigliani-Miller propositions with and without tax as the reference framework

Calculate a weighted average cost of capital for a simple two-source firm, including the tax shield on debt interest

Distinguish between the main sources of corporate finance (equity, debt, retained earnings, hybrid instruments) and state one advantage and one drawback of each

Derive the value of a plain vanilla bond and an ordinary share using discounted cash flow, and explain why the two discount rates differ

Apply the main investment appraisal techniques (NPV, IRR, payback, discounted payback, profitability index) to a single project and justify which method should dominate the decision

Explain how the choice of discount rate interacts with project risk and the firm's overall cost of capital

Analyse dividend policy theories and articulate the practical and tax arguments for and against paying dividends

Interpret the key ratios from a set of published accounts: profitability, liquidity, gearing, efficiency and investor ratios

Value equities using dividend discount and free cash flow approaches, and identify the assumptions that drive the answer

Explain the payoff profiles and pricing intuition of derivatives (forwards, futures, options, swaps) without relying on advanced stochastic calculus

Describe the roles of the main financial intermediaries and the functions of money markets versus capital markets

Distinguish between primary and secondary markets and explain how exchange trading differs from over-the-counter dealing

Compute and interpret free cash flow to the firm and to equity, and reconcile them to reported profit

Assess earnings quality by identifying accruals, one-off items and accounting policy choices that distort comparability

Identify and quantify the main financial risks (market, credit, liquidity, interest rate, currency) facing a corporate treasury

Explain how duration, gap analysis and simple hedging instruments are used to manage interest rate and currency exposure

Explain the role of central banks and the transmission mechanism of monetary policy to asset prices and corporate financing costs

Summarise the main UK regulatory architecture relevant to financial firms and the principles-based approach to conduct regulation

Apply the core principles of the actuarial and financial code of ethics to two realistic conflict-of-interest scenarios

Distinguish the agency problems between shareholders, debtholders and managers, and state the governance mechanisms used to mitigate each

Explain the principal behavioural biases (overconfidence, anchoring, herding, loss aversion, framing) and give a financial market consequence of each

Evaluate how behavioural finance challenges the efficient markets hypothesis and where the limits of that challenge lie

Describe enterprise risk management frameworks and the difference between risk appetite, tolerance and capacity

Explain how risk culture, incentives and governance failures contribute to operational and conduct risk events

Analyse a firm's competitive position using a recognised framework and link the conclusion to its financial strategy

Explain the purpose and limitations of budgeting, variance analysis and divisional performance measurement including transfer pricing

Distinguish cost of capital, hurdle rate and residual income as tools for evaluating business unit performance

Identify the governance and ethical tensions that arise when strategy, incentives and reporting interact, for example in earnings management

Consolidate the heaviest domains by re-deriving every core formula from first principles without notes

Complete full-length timed practice under exam conditions and manage time allocation across question types

Diagnose remaining weak areas and close them with targeted re-study rather than broad re-reading

Rehearse concise written explanations for discursive marks, structuring answers as point, evidence, implication