WGU C214 FINANCIAL MANAGEMENT OA
AND PA 2026-2027 BANK 2 VERSIONS
CURRENTLY TESTING COMPLETE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS /EXPERT VERIFIED /ALREADY
GRADED A+
Which section of the Statement of Cash Flows describes
the production and sales of the firm's product?
a. Cash Flow Operations
b. Cash Flow Investing
c. Cash Flow Financing.
d. Cash Flow Securities - ....ANSWER...a
For calculating cash flows, why is depreciation added to
Net Income?
a. To offset taxes
b. Depreciation is a non-cash deduction
c. To determine pre-tax income
d. None of the above - ....ANSWER...b
,The fundamental concept underlying the valuation of all
financial assets is:
a. The application of the PE ratio
b. Use of the Gordon Model
c. The present value of anticipated cash flows.
d. The future value of cash flows - ....ANSWER...c
What explains the size of the yield spread of junk bonds
over Treasury?
a. It is the value of the expected default loss
b. It depends the firm'a profit
c. It is the probability of default
d. It is a "psychological' reaction of investors. -
....ANSWER...a
What does Beta measure?
a. The default risk of a stock
b. The relative riskiness of an individual stock
c. Indicates the market value of the stock
,d. Stocks to avoid purchasing - ....ANSWER...b
What is the most effective use of financial statements in
valuing a stock?
a. Use the book value of equity on the balance sheet
b. Use GAAP earnnings
c. Use data to estimate future earnings
d. Read the footnotes - ....ANSWER...c
If market interest rates rise, what impact does it have on a
given bond?
a. Its price decreases
b. It will have a discount price
c. No impact since the coupon rate is fixed
d. Its price increases - ....ANSWER...a
What impact did the recent corporate tax cut have on a
firm's WACC?
a. It decreased WACC
b. It increased WACC
, c. No impact since WACC depend on firm risk
d. None of the above - ....ANSWER...b
Why do firms often use "sensitivity" tests in analyzing
investment projects
a. Required by the SEC
b. Uncertainty of forecast assumptions
c. Auditors require it.
d. Required section of financial statements -
....ANSWER...b
If debt is less costly than equity, why don't firms
maximize debt use?
a. Excessive debt inceases risk of banruptcy
b. Restricted by Federal tax regulations
c. It reduces the benfits of financial leverage
d. It increases operating leverage - ....ANSWER...a
Why does a firm's investment opportunities affect it
dividend payout ratio?
a. Maximization of shareholder wealth strategy
AND PA 2026-2027 BANK 2 VERSIONS
CURRENTLY TESTING COMPLETE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS /EXPERT VERIFIED /ALREADY
GRADED A+
Which section of the Statement of Cash Flows describes
the production and sales of the firm's product?
a. Cash Flow Operations
b. Cash Flow Investing
c. Cash Flow Financing.
d. Cash Flow Securities - ....ANSWER...a
For calculating cash flows, why is depreciation added to
Net Income?
a. To offset taxes
b. Depreciation is a non-cash deduction
c. To determine pre-tax income
d. None of the above - ....ANSWER...b
,The fundamental concept underlying the valuation of all
financial assets is:
a. The application of the PE ratio
b. Use of the Gordon Model
c. The present value of anticipated cash flows.
d. The future value of cash flows - ....ANSWER...c
What explains the size of the yield spread of junk bonds
over Treasury?
a. It is the value of the expected default loss
b. It depends the firm'a profit
c. It is the probability of default
d. It is a "psychological' reaction of investors. -
....ANSWER...a
What does Beta measure?
a. The default risk of a stock
b. The relative riskiness of an individual stock
c. Indicates the market value of the stock
,d. Stocks to avoid purchasing - ....ANSWER...b
What is the most effective use of financial statements in
valuing a stock?
a. Use the book value of equity on the balance sheet
b. Use GAAP earnnings
c. Use data to estimate future earnings
d. Read the footnotes - ....ANSWER...c
If market interest rates rise, what impact does it have on a
given bond?
a. Its price decreases
b. It will have a discount price
c. No impact since the coupon rate is fixed
d. Its price increases - ....ANSWER...a
What impact did the recent corporate tax cut have on a
firm's WACC?
a. It decreased WACC
b. It increased WACC
, c. No impact since WACC depend on firm risk
d. None of the above - ....ANSWER...b
Why do firms often use "sensitivity" tests in analyzing
investment projects
a. Required by the SEC
b. Uncertainty of forecast assumptions
c. Auditors require it.
d. Required section of financial statements -
....ANSWER...b
If debt is less costly than equity, why don't firms
maximize debt use?
a. Excessive debt inceases risk of banruptcy
b. Restricted by Federal tax regulations
c. It reduces the benfits of financial leverage
d. It increases operating leverage - ....ANSWER...a
Why does a firm's investment opportunities affect it
dividend payout ratio?
a. Maximization of shareholder wealth strategy
