WGU C214 FINAL EXAM 2025/2026 BANK / 2
VERSIONS WITH 550 QUESTIONS AND
ACCURATE ACTUAL EXAM WITH
FREQUENTLY TESTED QUESTIONS AND
STUDY GUIDE / EXPERT VERIFIED FOR
GUARANTEED PASS/ALREADY GRADED A+
What makes the "efficient frontier" efficient?
A. It always produces the minimum risk
B. It disregards risk to produce the maximum return
C. It provides the highest level of risk for a given return
D. It maximizes the ratio of expected return to risk -
....ANSWER...d
What are 3 components required in calculating weighted
average cost of capital (WACC)?
A. The market cap of the company
B. The desired growth rate
C. The amount and required return for common equity,
preferred equity and debt
D. The marginal tax rate
E. The value of preferred stock and debt
1
,F. The firm's market value
G. The combined total expected growth rate -
....ANSWER...d, e, f
What advantage does the Gordon growth model have
compared to the capital asset pricing model (CAPM)?
A. It requires assumptions about growth that benefit fast
growing companies
B. It provides an easier to understand and
relatively accurate forecast when growth rates
are stable
C. It is highly accurate in predicting future growth
D. It requires the use of accurate known factors, such as
future growth rates - ....ANSWER...b
How does the weighted average cost of capital affect a
company's growth opportunities?
A. The higher the cost of capital, the greater the growth
opportunities
B. Only the cost of debit will affect growth opportunities
C. The lower the cost of capital, the lower the growth
opportunities
2
,D. The lower the cost of capital, the greater the
growth opportunities - ....ANSWER...d
Under which three conditions would a firm decide to
reduce the growth rate?
A. When investors are dissatisfied with the dividend
payout ratio
B. When additional investor capital is not available
C. When capacity has been reached
D. When customers are dissatisfied with the
company's products
E. When the company's borrowing limits have reached the
maximum allowed by the lender - ....ANSWER...b, c, d
Trading on the NYSE is executed without a specialist (i.e.
a market maker). (T/F) - ....ANSWER...F
Stocks and bonds are two types of financial instruments
(T/F) - ....ANSWER...T
The matching principle in accrual accounting requires
that:
3
, a. Revenues be recognized when the earnings
process is complete and matches expenses to
revenues recognized.
b. Expenses are matched to the year in which they are
incurred
c. Revenues are matched to the year in which they are
booked
d. Revenues should be large enough to match expenses -
....ANSWER...a
What is the current price of the bond, if the required rate
of return on a bond is the same as the coupon rate?
A. Greater than the par value of the bond
B. Equal to the par value of the bond
C. The current prevailing market price of the bond
D. Less than the par value of the bond - ....ANSWER...b
If the current coupon rate on a bond is 6% and the bond is
selling at a 5% discount, what is the yield to maturity on
the bond?
4
VERSIONS WITH 550 QUESTIONS AND
ACCURATE ACTUAL EXAM WITH
FREQUENTLY TESTED QUESTIONS AND
STUDY GUIDE / EXPERT VERIFIED FOR
GUARANTEED PASS/ALREADY GRADED A+
What makes the "efficient frontier" efficient?
A. It always produces the minimum risk
B. It disregards risk to produce the maximum return
C. It provides the highest level of risk for a given return
D. It maximizes the ratio of expected return to risk -
....ANSWER...d
What are 3 components required in calculating weighted
average cost of capital (WACC)?
A. The market cap of the company
B. The desired growth rate
C. The amount and required return for common equity,
preferred equity and debt
D. The marginal tax rate
E. The value of preferred stock and debt
1
,F. The firm's market value
G. The combined total expected growth rate -
....ANSWER...d, e, f
What advantage does the Gordon growth model have
compared to the capital asset pricing model (CAPM)?
A. It requires assumptions about growth that benefit fast
growing companies
B. It provides an easier to understand and
relatively accurate forecast when growth rates
are stable
C. It is highly accurate in predicting future growth
D. It requires the use of accurate known factors, such as
future growth rates - ....ANSWER...b
How does the weighted average cost of capital affect a
company's growth opportunities?
A. The higher the cost of capital, the greater the growth
opportunities
B. Only the cost of debit will affect growth opportunities
C. The lower the cost of capital, the lower the growth
opportunities
2
,D. The lower the cost of capital, the greater the
growth opportunities - ....ANSWER...d
Under which three conditions would a firm decide to
reduce the growth rate?
A. When investors are dissatisfied with the dividend
payout ratio
B. When additional investor capital is not available
C. When capacity has been reached
D. When customers are dissatisfied with the
company's products
E. When the company's borrowing limits have reached the
maximum allowed by the lender - ....ANSWER...b, c, d
Trading on the NYSE is executed without a specialist (i.e.
a market maker). (T/F) - ....ANSWER...F
Stocks and bonds are two types of financial instruments
(T/F) - ....ANSWER...T
The matching principle in accrual accounting requires
that:
3
, a. Revenues be recognized when the earnings
process is complete and matches expenses to
revenues recognized.
b. Expenses are matched to the year in which they are
incurred
c. Revenues are matched to the year in which they are
booked
d. Revenues should be large enough to match expenses -
....ANSWER...a
What is the current price of the bond, if the required rate
of return on a bond is the same as the coupon rate?
A. Greater than the par value of the bond
B. Equal to the par value of the bond
C. The current prevailing market price of the bond
D. Less than the par value of the bond - ....ANSWER...b
If the current coupon rate on a bond is 6% and the bond is
selling at a 5% discount, what is the yield to maturity on
the bond?
4
