WGU C214 FINANCIAL MANAGEMENT PASS THE OA
EXAM 2026 LATEST UPDATE QUESTIONS AND CORRECT
VERIFIED ANSWERS ALREADY GRADED A+
Which best describes the market risk premium? - ANS-Excess return over risk free rate
What best describes beta? - ANS-Stock price volatility relative to market feasibility
Which is not a means of eliminating idiosyncratic risk? - ANS-Buy a low beta stock
The required return on stocks is derived from? - ANS-Systematic risk
A prudent investor would seek? - ANS-Maximize return for investor's risk tolerance
A stock whose return is affected substantially by a recession is? - ANS-High beta stock
Which factor does not affect WACC? - ANS-Efficiency ratio
Which factor does not impact a stocks price? - ANS-Maturity date
If the firm believes that the market under-values its stock, it should? - ANS-Buy back stock
A firm is a good investment if? - ANS-It's price is less than intrinsic value
Why does a firm calculate WACC? - ANS-It is the cost of financing the firm
, Which is a difference between stocks and bonds? - ANS-Increased required return always
reduces price
Which is the correct order in terms of lowest to highest required return? - ANS-Secured bonds,
preferred stock, common stock
Which measures sales growth that can be financed internally? - ANS-SGR
Why are accurate sales forecast desirable? - ANS-To plan resource acquisition
What components of ICF are included in Gross PPE? - ANS-Cost of asset, shipping & installation
installment
If an equipment salvage value is greater than book value? - ANS-There is a tax cash outflow
A potential project should be adopted if? - ANS-IRR is greater than WACC
A firm will have volatile profits if? - ANS-It has high operating leverage, high financial leverage
and high combined cash leverage.
Which firm is more likely to use high financial leverage? - ANS-Firm with stable sales and manual
production
Excess leverage will likely result in? - ANS-Increased WACC and reduced stock price
Why might a firm by back stock? - ANS-Increase leverage and boost the stock price
EXAM 2026 LATEST UPDATE QUESTIONS AND CORRECT
VERIFIED ANSWERS ALREADY GRADED A+
Which best describes the market risk premium? - ANS-Excess return over risk free rate
What best describes beta? - ANS-Stock price volatility relative to market feasibility
Which is not a means of eliminating idiosyncratic risk? - ANS-Buy a low beta stock
The required return on stocks is derived from? - ANS-Systematic risk
A prudent investor would seek? - ANS-Maximize return for investor's risk tolerance
A stock whose return is affected substantially by a recession is? - ANS-High beta stock
Which factor does not affect WACC? - ANS-Efficiency ratio
Which factor does not impact a stocks price? - ANS-Maturity date
If the firm believes that the market under-values its stock, it should? - ANS-Buy back stock
A firm is a good investment if? - ANS-It's price is less than intrinsic value
Why does a firm calculate WACC? - ANS-It is the cost of financing the firm
, Which is a difference between stocks and bonds? - ANS-Increased required return always
reduces price
Which is the correct order in terms of lowest to highest required return? - ANS-Secured bonds,
preferred stock, common stock
Which measures sales growth that can be financed internally? - ANS-SGR
Why are accurate sales forecast desirable? - ANS-To plan resource acquisition
What components of ICF are included in Gross PPE? - ANS-Cost of asset, shipping & installation
installment
If an equipment salvage value is greater than book value? - ANS-There is a tax cash outflow
A potential project should be adopted if? - ANS-IRR is greater than WACC
A firm will have volatile profits if? - ANS-It has high operating leverage, high financial leverage
and high combined cash leverage.
Which firm is more likely to use high financial leverage? - ANS-Firm with stable sales and manual
production
Excess leverage will likely result in? - ANS-Increased WACC and reduced stock price
Why might a firm by back stock? - ANS-Increase leverage and boost the stock price
