Published Apr 28, 2023
The course explores decisions faced by managers of firms. In particular, decision-makers must determine which long-term real investment opportunities to exploit. Once undertaken, managers must decide how to finance the projects, for example, by debt or equity. The course develops both the conceptual framework and the tools required for these decisions. The course assumes prior familiarity with probability, expected values, and variance.
Prereq: ECON 101 or ECON 100/COMM 103; ECON 221 or any prior course in probability and/or basic statistics; Level at least 2B. Antireq: AFM 271/273, AFM 274/371, ACTSC 372 after fall 2014
| Describe each item found on the Statement of Earnings, Statement of Changes in Equity and Statement of Financial Position. |
| Value a series of many cashflows using interest and discount formula. |
| Identify nominal rate of interest and real rate of interest in inflated economic conditions. |
| Apply formula to value different systems of repeated cashflows, including annuities, Annuities Due, and perpetuity. |
| Define and understand the fundamental features and elements of fixed-income instruments including bonds. |
| Use financial models to value bonds. |
| Explain what a yield curve is and plot the yield curve using zero-coupon bond yields. |
| Define and understand the fundamental features and elements of stocks. |
| Use financial models to value stocks. |
| Use capital budgeting techniques to evaluate profitability of future projects. |
| Week | Topics | |
| 1 | Introduction to Corporate Finance | |
| 2 | Financial Statement Analysis | |
| 3 | The Time Value of Money | |
| 4 | The Time Value of Money | |
| 5 | The Time Value of Money | |
| 6 | Bonds | |
| 7 | Bonds | |
| 8 | Bonds | |
| 9 | Valuing Stocks | |
| 10 | Valuing Stocks | |
| 11 | Investment Decision Rules | |
| 12 | Capital Budgeting | |
| 13 | Capital Budgeting |
| Title / Name | Notes / Comments | Required |
|---|---|---|
| Fundamentals of Corporate Finance by Jonathan Berk, Peter Demarzo, Jarrad Harford, David A. Stangeland, Andras Marosi., Third Canadian Edition Plus MyLab Finance -- Access Card Package, 3/E | No | |
| Laptops/Tablets with MS Excel installed | No |
| Component | Value |
|---|---|
| In-class Activities | 10% (Top 60% of marks count) |
| Bonus Activities | Maximum 3% |
| Tests | 10% (2 Tests) |
| Midterm | 30% |
| Final Exam | 50% |
Contingency teaching plan
If, for any reason, we are forced to switch to fully online synchronous teaching, the remainder of lectures and tutorials will be instructed synchronous online, and tests, midterm test, and/or the final exam will be written synchronous online. In this case, the timing for each test/exam will be increased to accommodate the different format/style of the test and to allow you time for scanning and uploading your papers.
Communication:
Activities:
Tests & Midterms
The in-class tests .and midterms will be written during normal lecture time on the scheduled dates below:
Schedule of Tests
| Date |
Test1 | Wed, Jun 7th |
Midterm | Wed, Jun 21st |
Test 2 | Wed, Jul 19th |
Tests
Final Exam
Re-grading requests should be made within one week after the return of the graded examinations. A regrading request after a due date will not be accepted. The instructor reserves the right to re-grade the entire examination. Appeals will only be considered where the total marks involved are 5% or more of the total available marks on the exam, because marks below the 5% cut-off do not materially affect the final course grade. Final exam grade appeal procedures are consistent with overall University policy.
Email from the Instructor: The instructor will use students’ emails as a major way for out-of-the class communication (e.g., making some announcements, answering some common questions, etc.). The LEARN group email list will be used for sending out class emails. Students should make sure that they can get their emails via LEARN group email. To communicate with the instructor via e-mail, arash.soleimanidahaj@uwaterloo.ca
Email Communication: When you email your instructor, make sure you include the following information in your email:
No assignment screening will be used in this course.
All deferred Final Exam requests for economics courses are administered by the Economics Undergraduate Office. Please consult the Deferred Exam Policy at
https://uwaterloo.ca/economics/undergraduate/resources-and-policies/deferred-final-exam-policy.
All of us need a support system. The faculty and staff in Arts encourage students to seek out mental health support if they are needed.
On Campus
Due to COVID-19 and campus closures, services are available only online or by phone.
Off campus, 24/7
Full details can be found online on the Faculty of Arts website
Download UWaterloo and regional mental health resources (PDF)
Download the WatSafe app to your phone to quickly access mental health support information.
Academic integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. [Check the Office of Academic Integrity for more information.]
Grievance: A student who believes that a decision affecting some aspect of their university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70, Student Petitions and Grievances, Section 4. When in doubt, please be certain to contact the department’s administrative assistant who will provide further assistance.
Discipline: A student is expected to know what constitutes academic integrity to avoid committing an academic offence, and to take responsibility for their actions. [Check the Office of Academic Integrity for more information.] A student who is unsure whether an action constitutes an offence, or who needs help in learning how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group work/collaboration should seek guidance from the course instructor, academic advisor, or the undergraduate associate dean. For information on categories of offences and types of penalties, students should refer to Policy 71, Student Discipline. For typical penalties, check Guidelines for the Assessment of Penalties.
Appeals: A decision made or penalty imposed under Policy 70, Student Petitions and Grievances (other than a petition) or Policy 71, Student Discipline may be appealed if there is a ground. A student who believes they have a ground for an appeal should refer to Policy 72, Student Appeals.
Note for students with disabilities: AccessAbility Services, located in Needles Hall, Room 1401, collaborates with all academic departments to arrange appropriate accommodations for students with disabilities without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen the impact of your disability, please register with AccessAbility Services at the beginning of each academic term.
Turnitin.com: Text matching software (Turnitin®) may be used to screen assignments in this course. Turnitin® is used to verify that all materials and sources in assignments are documented. Students' submissions are stored on a U.S. server, therefore students must be given an alternative (e.g., scaffolded assignment or annotated bibliography), if they are concerned about their privacy and/or security. Students will be given due notice, in the first week of the term and/or at the time assignment details are provided, about arrangements and alternatives for the use of Turnitin in this course.
It is the responsibility of the student to notify the instructor if they, in the first week of term or at the time assignment details are provided, wish to submit alternate assignment.