BU 541
Accounting & Corporate Financial
Strategy
LATEST FINALS REVIEW
Q&S
©2024/2025
,1. Which of the following financial metrics best measures a
company's ability to generate profits relative to its equity?
a) Gross Margin
b) Return on Assets
c) Return on Equity
d) Current Ratio
Answer: c) Return on Equity
Rationale: Return on Equity (ROE) measures a company's
ability to generate profits from its shareholders' equity, making it
a key indicator of financial performance in terms of profitability
relative to equity.
2. In a leveraged buyout, which type of funding is most
commonly used to finance the acquisition?
a) Equity
b) Debt
c) Convertible Bonds
©2024/2025
, d) Preferred Stock
Answer: b) Debt
Rationale: Leveraged buyouts primarily rely on debt funding,
as this allows the acquiring company to make substantial
investments with less equity capital.
3. Which of the following strategies involves a company aiming
to achieve low costs relative to competitors?
a) Differentiation Strategy
b) Cost Leadership Strategy
c) Focus Strategy
d) Growth Strategy
Answer: b) Cost Leadership Strategy
Rationale: A cost leadership strategy is aimed at achieving
the lowest operational costs compared to competitors in the same
industry.
4. A company using the LIFO inventory method during periods
of rising prices will likely report:
©2024/2025
Accounting & Corporate Financial
Strategy
LATEST FINALS REVIEW
Q&S
©2024/2025
,1. Which of the following financial metrics best measures a
company's ability to generate profits relative to its equity?
a) Gross Margin
b) Return on Assets
c) Return on Equity
d) Current Ratio
Answer: c) Return on Equity
Rationale: Return on Equity (ROE) measures a company's
ability to generate profits from its shareholders' equity, making it
a key indicator of financial performance in terms of profitability
relative to equity.
2. In a leveraged buyout, which type of funding is most
commonly used to finance the acquisition?
a) Equity
b) Debt
c) Convertible Bonds
©2024/2025
, d) Preferred Stock
Answer: b) Debt
Rationale: Leveraged buyouts primarily rely on debt funding,
as this allows the acquiring company to make substantial
investments with less equity capital.
3. Which of the following strategies involves a company aiming
to achieve low costs relative to competitors?
a) Differentiation Strategy
b) Cost Leadership Strategy
c) Focus Strategy
d) Growth Strategy
Answer: b) Cost Leadership Strategy
Rationale: A cost leadership strategy is aimed at achieving
the lowest operational costs compared to competitors in the same
industry.
4. A company using the LIFO inventory method during periods
of rising prices will likely report:
©2024/2025
