University of Waterloo - ECON 372: Business Finance 2 (Solutions)

This course offers advanced exploration of corporate finance, focusing on essential topics such as security valuation, risk management, and financial forecasting. Through practical examples and case studies, students will learn to apply concepts like the Capital Asset Pricing Model (CAPM), investment performance evaluation, and financial derivatives to real-world scenarios. Key areas covered include capital markets, cost of capital determination, financing decisions, capital structure, and financial modeling. By the course's end, participants will have a comprehensive grasp of corporate finance principles, including maximizing market value, risk management through diversification, application of CAPM, and pro forma analysis for financial statements.

✔ Upon finishing the course, you should be able to:

• understand the role of capital markets and how risk is priced within them;
• analyze systematic risk and its impact on the equity risk premium;
• determine the cost of capital for various investment opportunities;
• evaluate the relationship between risk and the pricing of options;
• assess different methods and considerations for raising equity capital;
• explore the intricacies of debt financing and its implications for financial decision-making;
• examine payout policy decisions and their effects on financing and shareholder value;
• and - develop financial planning skills including financial modeling and pro forma analysis to forecast future performance.