D362 is the Corporate Finance course in WGU's Bachelor of Science in Finance, placed in the seventh term of the standard path (3 competency units).
WGU describes it as covering business structures, the roles of shareholders and stakeholders, capitalizing a company, and capital budgeting techniques that use the time value of money.
It also teaches you to calculate the cost of financing with the weighted average cost of capital, value stocks and bonds, and judge the value of the firm. The course is a gateway to the later finance courses, so weak spots in the mathematics tend to resurface.
Course at a Glance
| Item | Details |
|---|---|
| University | Western Governors University (WGU) |
| Course | D362 Corporate Finance |
| Program | Bachelor of Science, Finance |
| Credit | 3 competency units |
| Prerequisites (2023 guide) | Principles of Economics, Financial Statement Analysis, Business Law for Accountants; check your current plan |
| Subject area | Corporate finance and valuation |
What D362 Covers
| Competency (summarized) | What it involves |
|---|---|
| Structures, goals and regulatory environment of corporations | Sole proprietorships, partnerships, corporations, agency and stakeholder roles |
| Time value of money and leverage in investment decisions and capital budgeting | Present and future value, NPV, IRR, payback, operating and financial leverage |
| Stock and enterprise value from financial information and valuation models | Bond and stock valuation, WACC, firm value |
Key Concepts Explained
Time Value of Money
A dollar today is worth more than a dollar later because it can earn a return. Present value discounts a future amount: PV = FV / (1 + r)^n.
Example: A project returns $10,000 in three years and your required return is 8 percent. PV = 10,000 / 1.08^3 = 10,000 / 1.2597 = about $7,938. If the project costs $8,500 today, it destroys value at that rate.
Weighted Average Cost of Capital
WACC blends the cost of equity and the after-tax cost of debt by their weights in the capital structure: WACC = E/V x Re + D/V x Rd x (1 - tax rate).
Example: With 60 percent equity at 10 percent, 40 percent debt at 6 percent and a 25 percent tax rate, WACC = 0.6 x 10 + 0.4 x 6 x 0.75 = 6.0 + 1.8 = 7.8 percent.
Valuing Bonds and Stocks
Both are present values of expected cash flows. A bond is its coupons plus principal discounted at the market yield. A dividend-growth stock can be valued as D1 / (r - g).
Typical Assignments and How to Approach Them
| Assignment type | What it tests | How to approach it |
|---|---|---|
| Calculation problems | TVM, NPV, IRR, WACC, valuation | Write the formula, substitute, then state the result with units |
| Capital budgeting recommendation | Choosing between projects | Compare NPV and IRR, then explain the decision rule |
| Business structure analysis | Understanding legal and financial implications | Link structure to liability, tax and raising capital |
| Valuation write-up | Applying models to company data | State assumptions, show the model and discuss limits |
Business Structures and the Role of Shareholders
The first competency covers the structures, goals and regulatory environment of businesses. Know the main forms and what each means for liability, tax, ownership transfer and the ability to raise capital.
| Structure | Liability | Raising capital |
|---|---|---|
| Sole proprietorship | Owner personally liable | Limited to owner funds and loans |
| Partnership | Partners share liability | Limited, through partners |
| Corporation | Owners' liability limited to investment | Can issue stock and bonds |
Link these to the corporate goal of maximizing shareholder value and to agency issues, where managers' interests differ from owners'. Mention how governance and regulation limit conflicts. Keep exam-style definitions short and spend your words on application to the case.
Worked Capital Budgeting Comparison
Tasks often ask you to choose between two projects. Setting the cash flows out in a table keeps the logic clear.
| Year | Project A | Project B |
|---|---|---|
| 0 | -$30,000 | -$30,000 |
| 1 | $15,000 | $5,000 |
| 2 | $15,000 | $10,000 |
| 3 | $10,000 | $30,000 |
At a 10 percent required return, Project A's inflows are worth about 13,636 + 12,397 + 7,513 = $33,546, so NPV is roughly $3,546. Project B's are worth about 4,545 + 8,264 + 22,539 = $35,348, so NPV is roughly $5,348. Project A pays back faster, but Project B adds more value.
If the projects are mutually exclusive and the 10 percent rate is right, NPV favors B; mention that a higher discount rate narrows the gap.
Where Students Get Stuck
- Using the wrong rate or period. Match the discount rate to the cash flows and the compounding to the periods.
- Forgetting the tax shield. Debt cost in WACC is after tax.
- Conflicting NPV and IRR signals. Explain why NPV is usually preferred for mutually exclusive projects.
- Calculator errors. Check the answer against a quick estimate.
Study Tips for D362
- Build a one-page formula sheet with a worked example beside each formula.
- Redo each example with different numbers until the steps are automatic.
- Learn what each answer means in business terms, not only the figure.
- Review your D366 notes on financial statements before the valuation section.
How We Help with D362
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Frequently Asked Questions
Corporate finance: business structures, capital budgeting with the time value of money, WACC and valuation of stocks, bonds and the firm.
The program guide lists 3 competency units.
The 2023 program guide lists Principles of Economics, Financial Statement Analysis and Business Law for Accountants; confirm against your current degree plan.
It uses algebra and a financial calculator or spreadsheet, but understanding the logic matters more than speed.
Financial Management I and II build on it.
Yes. We review the method and arithmetic and explain any errors.