UNIVERSITY OF WATERLOO 
AFM 274: Introduction to Corporate Finance 
Comprehensive Revision Guide and Notes 2025 
 
Part 01: About This Guide 
Part 02: Sample Examination 
Part 03: Suggested Solutions to Exam Paper 
Part 04: Study Tips for Students 
 
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University of Waterloo - AFM 274: Introduction to Corporate Finance

C$35.00

ACADEMIC YEAR 2025 - 2026

University	University of Waterloo
School	Accounting and Finance
Course Code	AFM 274
Course Name	Introduction to Corporate Finance
Notes Title	Comprehensive Revision Guide and Notes
Page Length	36

This concise revision guide and notes explain the core theories in clear steps. Illustrations and fully worked examples show how to apply formulas and techniques. After the content, practice with a sample exam that includes complete solutions and explanations, designed to simulate typical exam conditions and question styles. You’ll also get practical examiner advice and targeted questions with answers for each key examinable topic, helping you focus your review and build confidence for exam day.

AFM 274: Introduction to Corporate Finance builds on the concepts from AFM 273. In this course, students learn how changes in a firm's capital structure and payout policy affect its value. They also estimate project and firm values using free cash flow forecasts under different financing scenarios, such as all-equity and leveraged financing. The course covers how both private and public firms raise capital, including equity and debt financing. Furthermore, it explores working capital management and helps students understand how to estimate a firm's short-term financing needs.

In this course, students explore key concepts essential for understanding corporate finance. The course covers risk and return, examining how these factors influence investment decisions. It also explores capital structure in perfect capital markets, highlighting the effects of debt and taxes on corporate finance. Other critical topics include financial distress, managerial incentives, and information asymmetry, along with payout policy, capital budgeting, and valuation with leverage. Students will also learn about equity and debt financing, as well as working capital management and short-term financial planning, providing a comprehensive overview of financial decision-making in corporations.

Prerequisites: AFM 272 or AFM 273.
Antirequisites: ACTSC 372, ACTSC 391, AFM 275, ECON 371, or AFM 392.

COURSE CODE	COURSE NAME
AFM 101	Introduction to Financial Accounting
AFM 102	Introduction to Managerial Accounting
AFM 231	Business Law
AFM 272	Global Capital Markets and Financial Analytics
AFM 273	Financial Instruments and Capital Markets
AFM 274	Introduction to Corporate Finance
AFM 275	Corporate Finance
AFM 280	Introduction to Organizational Behaviour
AFM 291	Intermediate Financial Accounting 1
AFM 322	Derivative Securities
AFM 391	Intermediate Financial Accounting 2
ECON 101	Introduction to Microeconomics
ECON 102	Introduction to Macroeconomics
ECON 201	Microeconomic Theory for Business and Policy
ECON 221	Statistics for Economists
ECON 290	Models of Choice in Competitive Markets
ECON 322	Econometric Analysis 1
ECON 323	Econometric Analysis 2
ECON 371	Business Finance 1
ECON 372	Business Finance 2
ECON 423	Time Series Econometrics
MGMT 244	Principles of Marketing
PSYCH 292	Basic Data Analysis
STAT 202	Introductory Statistics for Scientists
STAT 443	Forecasting

University of Waterloo - AFM 274: Introduction to Corporate Finance

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