D775 WGU SECTION 4 UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

D775 WGU SECTION 4 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS

Question:
1. Equity Capital
Answer:
A major type of capital in which companies sell ownership in their firm, and the proceeds from the sale of
this ownership is capital that can be used to invest

Question:
2. Debt Capital
Answer:
capital that is obtained by companies when they borrow money from a lender.

Question:
3. Retained Earnings
Answer:
cash from previous profitability, as capital.

Question:
4. discretionary financing need (DFN)
Answer:
Measures the shortfall in funding that must be addressed through external financing options.

Question:
5. When calculating the Discretionary Financing Need (DFN
Answer:
The firm's total financing need for a project and the funding the company currently has in place

Question:
6. DFN plays a critical role in
Answer:
working capital management by identifying when a company requires external financing to meet its
short-term operational needs.

Question:
7. Working Capital
Answer:
funds used to manage day-to-day operations, such as purchasing inventory, paying suppliers, and covering
payroll.

Question:
8. debt financing
Answer:
borrowing funds through loans or issuing bonds, which must be repaid with interest