WGU C214 OA FINANCIAL MANAGEMENT
EXAMPREP 2026 REAL EXAM QUESTIONS
WITH ACCURATE SOLUTIONS GRADED A+
◉ 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.
◉ Net Present Value (NPV). Answer: Capital budgeting with TVM to
analyze the projected profitability. Difference between the present
value of cash inflows and the present value of cash outflows over a
period of time.
◉ Internal Rate of Return (IRR). Answer: Capital budgeting with
TVM to evaluate the attractiveness of a project or investment. The
discount rate that forces a project's NPV to equal zero.
◉ Sarbanes-Oxley Act of 2002. Answer: Federal regulations resulting
from corporate frauds such as Enron and designed to protect
investors from fraud.
EXAMPREP 2026 REAL EXAM QUESTIONS
WITH ACCURATE SOLUTIONS GRADED A+
◉ 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.
◉ Net Present Value (NPV). Answer: Capital budgeting with TVM to
analyze the projected profitability. Difference between the present
value of cash inflows and the present value of cash outflows over a
period of time.
◉ Internal Rate of Return (IRR). Answer: Capital budgeting with
TVM to evaluate the attractiveness of a project or investment. The
discount rate that forces a project's NPV to equal zero.
◉ Sarbanes-Oxley Act of 2002. Answer: Federal regulations resulting
from corporate frauds such as Enron and designed to protect
investors from fraud.
