Equity & Capital Markets
Understand how companies raise capital, how equity instruments are structured and valued, and how markets price risk — essential knowledge for every finance professional.
Course Overview
What is Equity & Capital Markets?
The equity capital market is where businesses and financial institutions raise cash by issuing ownership stakes in exchange for capital. Unlike debt markets, equity markets carry higher risk but offer the potential for superior returns. This course covers the full landscape of equity and capital markets — from instrument types and IPO mechanics to valuation frameworks and capital structure theory.
Learning Objectives
What You Will Learn
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Equity instrumentsDistinguish between common shares, preferred shares, and hybrid instruments, and understand their respective rights and claims.
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Capital raisingExplain how companies raise equity capital through primary and secondary markets, including IPOs and rights issues.
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Valuation frameworksApply DCF, price multiples, and dividend discount models to value equity securities.
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Market mechanicsUnderstand how equity markets operate — order types, market makers, bid-ask spreads, and price discovery.
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Capital structureAnalyse the trade-offs between debt and equity financing and their impact on a firm's cost of capital.
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Risk & returnApply CAPM and factor models to measure expected returns and understand systematic vs unsystematic risk.
Who Is This For?
Prerequisites & Who Should Enrol
- Finance students wanting to understand how equity markets actually work.
- CFA candidates covering equity investments and capital markets topics.
- Aspiring investment bankers or equity research analysts.
- Anyone interested in understanding how stock prices and company valuations are determined.
- Basic understanding of financial statements is helpful but not required.
Got Questions?
Frequently Asked Questions
What is the difference between common and preferred shares?
Common shareholders have residual claims on earnings and assets after all other obligations are met, along with voting rights. Preferred shareholders receive fixed dividends and have a prior claim over common shareholders, but typically have no voting rights.
How does equity differ from debt as a source of capital?
Equity does not require repayment and carries no fixed interest obligations — but it dilutes ownership. Debt is cheaper (tax-deductible interest) but creates financial risk through mandatory payments. The optimal capital structure balances these trade-offs.
Is this relevant for the CFA exam?
Yes — Equity Investments is one of the largest topic weights across CFA Level 1 and Level 2. This course directly covers and reinforces those exam topics.