BU393 — Financial Management II 2026 Original Update MOCK FINAL EXAM (Practice) with complete Answer Key & Worked Solutions Wilfrid Laurier University

BU393 — Financial Management II 2026 Original Update MOCK FINAL EXAM (Practice) with
complete Answer Key & Worked Solutions Wilfrid Laurier University
BU393 — Financial Management II
MOCK FINAL EXAM (Practice)
120 minutes · 21 questions + 1 bonus · 30 points total

Instructions
Answers are fill-in-the-blank and predominantly computational, matching the real exam format. Follow the
unit and decimal-place requirement stated beside each blank — enter 5.00, not 5%, not 0.05. Marks are lost
for wrong units or rounding. A basic formula sheet is NOT provided here: part of the practice is recalling the
formulas. Time yourself: 120 minutes.
Note on coverage: Module 1 (Capital Budgeting) is excluded by design. Its exam weight has been
redistributed proportionally, so this mock is: Valuation 14 pts, Distributions 5 pts, M&A 2.5 pts, Capital
Structure 8.5 pts. On the real exam, expect ~6 pts of Capital Budgeting and correspondingly fewer points in
the other modules.

Module 2 — Valuation (14 points)
Question 1 (1 point)
GreenLeaf Farms is a greenhouse tomato producer operating on 150 acres. Last year it harvested 600,000
pounds per acre and sold at an average price of $1.25 per pound. A new trade agreement is expected to
immediately raise greenhouse tomato prices by 20%, and a new growing technology raises this year's yield to
750,000 pounds per acre. What will sales revenues be this year?
Answer: ($, 0 decimals)

Question 2 (1 point)
OrangeCell's worldwide smartphone market share was 25% last year and is expected to stay constant.
Approximately 1,200 million smartphones were sold in the year just ending; analysts expect industry unit
sales to rise 8% next year. OrangeCell's average wholesale price is US$300. What are forecasted sales for next
year?
Answer: ($ millions, 0 decimals)

Question 3 (1.5 points)
Stretch Athletica has 220 corporate-owned stores in Year t, an average store size of 3,000 square feet, and
sales per square foot of $1,500. It plans to add 40 stores in Year t+1. Assume same-store sales growth of 4%
(existing and new stores) and that new stores earn only half a year of sales. Forecast total revenues for Year
t+1.
Answer: ($ millions, 1 decimal)

Question 4 (1 point)
In Year 5, Colossal Mart reported depreciation expense of $450 and net fixed assets of $8,550 (both $
millions). Estimate the depreciation rate (dr).
Answer: (%, 2 decimals)

Question 5 (1.5 points)
East L.A. Crossover Inc. reports the following ($000s): Year 1 net fixed assets of 20,000; Year 2 sales rose from
100,000 to 108,000, Year 2 depreciation was 3,000, and Year 2 net fixed assets were 22,500. Compute total
CAPEX in Year 2 and the gx ratio (gCAPEX ÷ ΔSales).
Answer: CAPEX ($000s, 0 dec); gx (ratio, 2 decimals)

, Question 6 (2 points)
Titan Stores has Year t net fixed assets of $12,000, a depreciation rate of 8%, and a gx ratio of 0.40. Sales are
forecast to grow from $40,000 in Year t to $42,000 in Year t+1 (all $ millions). Forecast: (a) total CAPEX for
t+1, (b) depreciation expense for t+1, and (c) net fixed assets at the end of t+1.
Answer: three values ($ millions, 2 decimals)

Question 7 (1 point)
Titan Stores had total debt of $5,000 at the end of Year 1 and $5,400 at the end of Year 2. Interest expense in
Year 2 was $350. Forecast interest expense for Year 3.
Answer: ($, 2 decimals)

Question 8 (2 points)
A firm forecasts EBIT of $2,400, depreciation of $500, capital expenditures of $900, and an increase in net
working capital of $150. The tax rate is 30%. Compute (a) operating cash flow and (b) free cash flow.
Answer: two values ($, 0 decimals)

Question 9 (1 point)
A firm has current assets of $5,000 (including cash of $800) and current liabilities of $3,200 (including
short-term debt of $600). Using the FCF definition, what is net working capital?
Answer: ($, 0 decimals)

Question 10 (2 points)
A junior analyst forecasts free cash flows for Fritz Electric of $15, $25, and $35 ($ millions) at the end of Years
1, 2, and 3. After Year 3, FCF grows at 3% in perpetuity. The WACC is 10%. Compute the terminal value as of
Year 3 and the value of the firm at Year 0.
Answer: TV and V ($ millions, 2 decimals)

Module 3 — Distributions (5 points)
Question 11 (1 point)
A stock trades cum-dividend at $44.20. The declared dividend is $0.60 per share. In perfect capital markets
with no taxes, what price should prevail on the morning of the ex-dividend day?
Answer: ($, 2 decimals)

Question 12 (1.5 points)
Bumper Auto Body follows a strict residual dividend policy. Its debt-equity ratio is 1.5 and it has 500,000
shares outstanding. Net income for the year is $400,000 and planned investment outlays are $800,000. What
dividend per share will it pay?
Answer: ($ per share, 2 decimals)

Question 13 (1.5 points)
TransGlobe Airlines earns free cash flow of $6M annually in perpetuity (next FCF in one year) and holds $3M
of cash it will use to repurchase stock. There are 500,000 shares outstanding, the firm is all-equity financed,
and shareholders require 15%. TransGlobe offers $100 per share and repurchases 30,000 shares. What is the
stock price after the repurchase?
Answer: ($, 2 decimals)

Question 14 (1 point)