How to use this guide
Where this guide comes from. It follows the course's published description (how financial capital is allocated, and how risk, the time involved and imperfect markets shape what assets are worth; the time value of money; trading risk against return; and the investing and financing choices of companies) and the standard topics for an introductory corporate finance course. Instructors' emphasis and notation vary: check your own course outline.
The order. 01 reads the financial statements. 02 and 03 are the time value of money, the engine for everything after it. 04 and 05 value bonds and stocks with that engine. 06 and 07 measure risk and turn it into a required return (CAPM) and a company-wide cost of capital (WACC). 08 and 09 use all of it to decide whether a project is worth doing: NPV, IRR, and the incremental cash flows including the Canadian CCA tax shield.
Inside a topic: read the idea, look at the formula, then open the worked example and follow every step. Close it and redo it on paper. Then change the numbers in the lab until the answer stops surprising you, and finish with the traps.
Notation used here: PV and FV are present and future value, PMT a regular payment, r a rate per period, n a number of periods, APR a quoted annual rate, EAR the effective annual rate, g a growth rate, k or r a required return, T the corporate tax rate, d the CCA rate. Money is in Canadian dollars. Percentages are written 5.4%, but formulas use decimals (0.054).
Rounding. Carry full precision on a calculator and round only the final answer. Table factors rounded to four decimals can move a bond price or an NPV by a few dollars; the labs and drills allow for that.
Then practise. The Drill, the multiple-choice bank and the flashcards are all levelled:
| Level | What it asks | Example |
|---|---|---|
| Beginner | A definition, or one step: one formula, one answer | What is $4,000 worth after 6 years at 5% a year? |
| Intermediate | A standard problem in a few steps | Price a 10-year bond with semi-annual coupons, or find a loan payment |
| Exam level | A full exam-style question that strings several steps together | Find a project's NPV including the CCA tax shield and working capital |
| Hard | Twists: working backwards, unusual timing, conflicts between methods | Find the yield on a bond from its price, or explain why NPV and IRR disagree |
The question generator starts on Auto (ramps up): it begins at Beginner and moves up a level after three correct answers in a row. You can pick a level yourself at any time. The multiple-choice bank and flashcards are ordered from easy to hard, so working through them in order builds each idea from the ground up.
Canadian conventions to know: mortgages are quoted with semi-annual compounding but paid monthly; bonds pay coupons semi-annually and their yields are quoted the same way; the declining-balance CCA system (Topic 09) replaces accounting depreciation for taxes. Rules and rates change, so use the ones your course gives you.
Exam format, weight and allowed aids differ between sections and terms. Check your own course outline.
Sign in to open the full guide
This is the first section. The full guide has every topic, the labs and the practice questions.
Create an account · Forgot password, or no password yet? Got a code link from your class? Open it and it will ask you to sign in.