University of Waterloo Department of Statistics and Actuarial Science Winter 2014 ActSc 372 Corporate Finance II Instructor: Hellen Hou Office: M3 4101 Phone: Ext. 31512 Email: [email protected] Office Hours: W/Th 7-9pm Lectures:W 5:30-6:50pm @ MC 2065 + Th 5:30-6:50pm @ MC 2066 Tutorial: F 8 :30-9:20am @ DC 1351 Course Webpage: learn.uwaterloo.caCourse Description ActSc 372 provides an introduction to the theory of investment decision making under uncertainty, including Markowitz mean-variance theory and expected utility theory, topics in asset pricing including the Capital Asset Pricing Model and the Arbitrage Pricing Theory. Market efficiency, capital structure and dividend policy and advanced topics. Required Textbook Corporate Finance, by Ross, Westerfield, Jaffe and Roberts. Sixth Canadian Edition. Published by McGraw-Hill Ryerson Limited, 2005. We will be covering chapters 10-19. The textbook will be supplemented by lecture notes. Syllabus 1.Overview of the capital markets 2.Measuring Risk and return 3.CAPM and APT 4.Risk, return and capital budgeting 5.Capital structure and dividend policy 6.Long term financing and the limits to debt 7.Utility Theory and decision making under uncertainty 8.Behavioural Finance and practical limits to financial models

Tentative Schedule Grading Scheme Assignments 10% Submitted in classProjects 10% TBD Midterms 25% February 12, 2014, 5:30-6:20pm March 12, 2014, 5:30-6:20pm Final 55% TBD

Important Notes 1.The lecture notes will be posted on the learn.uwaterloo.ca environment as soon as it becomes available. It is important to print a copy of the lecture notes before attending the lectures. 2.A discussion forum will be set up on the LEARN environment. The forum is designed for you to post questions, provide feedback, voice concerns, etc. with