WGU C214 Financial Management Exam Questions & Answers 100% Accurate

Initial Outlay - ANSWER-The total dollar amount to begin a project. Cost of Equity - ANSWER-How much it costs a firm (in percentage terms) to use equity financing. From the investor's perspective, it is what they require given the riskiness/opportunity cost of the company. From the companies perspective, it is the same rate, but it is what it "costs" to attract those potential investors. It is the return they must give investors for them to invest with their company. American Depository Receipts (ADRs) - ANSWER-Certificates issued by U.S. banks and traded on U.S. markets but represent shares of foreign stocks Degree of Operating Leverage (DOL) - ANSWER-Business risk examines the %change in operating cash flow relative to the %change in quantity sold Degree of Financial Leverage (DFL) - ANSWER-Financial Risk examines %change earnings per share relative to %change in OI (EBIT) National Banking Act of 1863 - ANSWER-Federal regulation to deal with "wildcat banking" (state-mandated remote and inaccessible banks not federally regulated) Federal Reserve Act of 1913 - ANSWER-Federal regulation to deal with bank runs and recessions; gave the 12 Federal Reserve banks the ability to print money to ensure economic stability. The Federal Reserve System created the dual mandate to maximize employment and keep inflation low. Form S-1 - ANSWER-Original prospectus (registration statement) filed with the SEC by firms prior to the sale of new securities to the public.