WGU C214 COMPLETE EXAM
QUESTIONS WITH CORRECT
SOLUTIONS||100% GUARANTEED
PASS||ALREADY GRADED
A+||UPDATED 2026/2027
SYLLABUS||<<LATEST VERSION>>
What effect does the method of financing investments have on the value of the
firm?
A. The method of financing investments alters the weighted average of the cost of
capital.
B. Financing through tax-advantage debt has no effect on the value of the firm
C. Issuing more costly (ie risker) bonds for financing investments has no effect on
the value of the firm
D. Any mehod of financing investments has the same effect on the value of the
firm - ANSWER ✓ a
Why would a company prefer equity financing over debt financing?
A. Too much debt can lead to a greater risk of possible insolvency
B. Equity financing has tax benefits
C. Issuing new debt diminishes the existing control of shareholders
D. Using equity to finance a capital investment project is less costly - ANSWER ✓
d
Which hybrid security has some elements that resemble equity and others that
resemble debt?
A. Derivative stock
B. Preferred stock
C. Common stock
D. Treasury stock - ANSWER ✓ b
How do increases in market interest rates affect a firm's cost of capital?
A. The cost of debt decreases
,B. The cost of equity decreases
C. The cost of debt increases
D. The cost of equity increases - ANSWER ✓ c
Which two ratios are used to evaluate a company's working capital management?
A. Receivable turnover
B. Earnings per share
C. Return on equity
D. Cash ratio
E Profit Margin - ANSWER ✓ a, d
Why should a company carry cash
A. The opportunity cost of holding cash is low
B. The shortage cost of holding cash is high
C. Cash is needed for day to day operations
D. Cash is needed to meet the customers demands - ANSWER ✓ c
What is commonly used method that limits the time it takes between payment and
the receipt of cash?
A. Automated data processing
B. Payment by mail processing
C. Disbursement float processing
D. Electronic check processing - ANSWER ✓ d
Some companies offer discounts to customers in order to give incentive for paying
earlier than the due date. What two terms incentivize customers to accept trade
discounts?
A. Cash cycle
B. Length of the credit period
C. Sales commission
D. Amount of discount
E. Days sales in receivables - ANSWER ✓ b, d
Which three costs are associated with holding inventory?
A. Variable costs
B. Opportunity costs
C. Storage costs
D. Product costs
E. Fixed costs - ANSWER ✓ b, c, d
,Which ratio is used in the comparable multiples method?
A. Quick ratio
B. Current ratio
C. Price earnings ratio
D. Debt to equity ratio - ANSWER ✓ c
Investors will often sell a stock that has gains rather than a stock that is suffering
losses in their portfolio, despite subsidized tax relief when selling at a loss. What
the logic-defying behavioral implications of such a decision.
A. Selling a stock at a gain results in dollar cost average benefits
B. Maintaining winning positions in the portfolio enhances future portfolio growth
rate
C. Investors hate taking a loss, especially when they can realize a gain
D. Selling an equity position at any point results in a favorable tax benefit -
ANSWER ✓ b
How are the Security and Exchange Commissions' Regulation S and Rule 144A
similar?
A. Both use incentives and penalties to ensure fair dealings between large financial
institutions and small investors.
B. Both allow firms to raise capital without registering with the SEC if certain
conditions are met
C. Both are intended to increase transparency of financial markets
D. Both encourage specialized training by individuals designated to sell securities -
ANSWER ✓ b
What is the primary intent of the Sarbanes-Oxley Act?
A. To impose requirements on stockholders of public companies
B. To reduce the fees associated with financial transactions
C. To control the rise in the rate of executive compensation
D. To ensure honest audit and accounting procedures - ANSWER ✓ d
Which element is a required disclosure in the prospectus, according to the
Securities Act of 1933?
A. Internal control reports
B. Tax returns
C. Audited financial statements
D. Budgets - ANSWER ✓ c
, Which condition must be met for a firm that trades in equities to be in compliance
with the Securities and Exchange (SEC) regulations?
Securities and Exchange (SEC) regulations?
A. Payments pursuant to the Sarbanes-Oxley Act
B. Participation in the MSRB (Municipal Securities Rulemaking Board)
C. Certification under the Dodd-Frank Act
D. Membership in FINRA (Financial Industry Regulatory Authority) - ANSWER
✓d
Which practice is limited by the Volcker rule of the Dodd-Frank Act?
A. The role of inside directors
B. Issuance of limited prospectuses
C. Bank investments in hedge funds
D. Conflicts of interests by bank board members - ANSWER ✓ c
What is beta?
A. An absolute measure of idiosyncratic risk
B. A measure of market value relative to the market risk
C. An absolute measure of systematic risk
D. A measure of systematic risk, relative to the market risk - ANSWER ✓ c
What do investors, entrepreneurs and other market participants rely on the SEC to
do?
A. Determine safety and efficiency of investment by US and foreign investors
B. Regulate the Money Supply
C. Prohibit foreign bribery
D. Require Private Firms to Register - ANSWER ✓ a
What is one way a firm maximizes shareholder value?
A. By switching inventory methods
B. By reducing the firm's labor force
C. By outsourcing the production of the firm's core product
D. By avoiding investments that cost more money than they bring in - ANSWER
✓d
What is one of the two basic types of financial instruments?
A. Money Markets
B. Mutual Funds
QUESTIONS WITH CORRECT
SOLUTIONS||100% GUARANTEED
PASS||ALREADY GRADED
A+||UPDATED 2026/2027
SYLLABUS||<<LATEST VERSION>>
What effect does the method of financing investments have on the value of the
firm?
A. The method of financing investments alters the weighted average of the cost of
capital.
B. Financing through tax-advantage debt has no effect on the value of the firm
C. Issuing more costly (ie risker) bonds for financing investments has no effect on
the value of the firm
D. Any mehod of financing investments has the same effect on the value of the
firm - ANSWER ✓ a
Why would a company prefer equity financing over debt financing?
A. Too much debt can lead to a greater risk of possible insolvency
B. Equity financing has tax benefits
C. Issuing new debt diminishes the existing control of shareholders
D. Using equity to finance a capital investment project is less costly - ANSWER ✓
d
Which hybrid security has some elements that resemble equity and others that
resemble debt?
A. Derivative stock
B. Preferred stock
C. Common stock
D. Treasury stock - ANSWER ✓ b
How do increases in market interest rates affect a firm's cost of capital?
A. The cost of debt decreases
,B. The cost of equity decreases
C. The cost of debt increases
D. The cost of equity increases - ANSWER ✓ c
Which two ratios are used to evaluate a company's working capital management?
A. Receivable turnover
B. Earnings per share
C. Return on equity
D. Cash ratio
E Profit Margin - ANSWER ✓ a, d
Why should a company carry cash
A. The opportunity cost of holding cash is low
B. The shortage cost of holding cash is high
C. Cash is needed for day to day operations
D. Cash is needed to meet the customers demands - ANSWER ✓ c
What is commonly used method that limits the time it takes between payment and
the receipt of cash?
A. Automated data processing
B. Payment by mail processing
C. Disbursement float processing
D. Electronic check processing - ANSWER ✓ d
Some companies offer discounts to customers in order to give incentive for paying
earlier than the due date. What two terms incentivize customers to accept trade
discounts?
A. Cash cycle
B. Length of the credit period
C. Sales commission
D. Amount of discount
E. Days sales in receivables - ANSWER ✓ b, d
Which three costs are associated with holding inventory?
A. Variable costs
B. Opportunity costs
C. Storage costs
D. Product costs
E. Fixed costs - ANSWER ✓ b, c, d
,Which ratio is used in the comparable multiples method?
A. Quick ratio
B. Current ratio
C. Price earnings ratio
D. Debt to equity ratio - ANSWER ✓ c
Investors will often sell a stock that has gains rather than a stock that is suffering
losses in their portfolio, despite subsidized tax relief when selling at a loss. What
the logic-defying behavioral implications of such a decision.
A. Selling a stock at a gain results in dollar cost average benefits
B. Maintaining winning positions in the portfolio enhances future portfolio growth
rate
C. Investors hate taking a loss, especially when they can realize a gain
D. Selling an equity position at any point results in a favorable tax benefit -
ANSWER ✓ b
How are the Security and Exchange Commissions' Regulation S and Rule 144A
similar?
A. Both use incentives and penalties to ensure fair dealings between large financial
institutions and small investors.
B. Both allow firms to raise capital without registering with the SEC if certain
conditions are met
C. Both are intended to increase transparency of financial markets
D. Both encourage specialized training by individuals designated to sell securities -
ANSWER ✓ b
What is the primary intent of the Sarbanes-Oxley Act?
A. To impose requirements on stockholders of public companies
B. To reduce the fees associated with financial transactions
C. To control the rise in the rate of executive compensation
D. To ensure honest audit and accounting procedures - ANSWER ✓ d
Which element is a required disclosure in the prospectus, according to the
Securities Act of 1933?
A. Internal control reports
B. Tax returns
C. Audited financial statements
D. Budgets - ANSWER ✓ c
, Which condition must be met for a firm that trades in equities to be in compliance
with the Securities and Exchange (SEC) regulations?
Securities and Exchange (SEC) regulations?
A. Payments pursuant to the Sarbanes-Oxley Act
B. Participation in the MSRB (Municipal Securities Rulemaking Board)
C. Certification under the Dodd-Frank Act
D. Membership in FINRA (Financial Industry Regulatory Authority) - ANSWER
✓d
Which practice is limited by the Volcker rule of the Dodd-Frank Act?
A. The role of inside directors
B. Issuance of limited prospectuses
C. Bank investments in hedge funds
D. Conflicts of interests by bank board members - ANSWER ✓ c
What is beta?
A. An absolute measure of idiosyncratic risk
B. A measure of market value relative to the market risk
C. An absolute measure of systematic risk
D. A measure of systematic risk, relative to the market risk - ANSWER ✓ c
What do investors, entrepreneurs and other market participants rely on the SEC to
do?
A. Determine safety and efficiency of investment by US and foreign investors
B. Regulate the Money Supply
C. Prohibit foreign bribery
D. Require Private Firms to Register - ANSWER ✓ a
What is one way a firm maximizes shareholder value?
A. By switching inventory methods
B. By reducing the firm's labor force
C. By outsourcing the production of the firm's core product
D. By avoiding investments that cost more money than they bring in - ANSWER
✓d
What is one of the two basic types of financial instruments?
A. Money Markets
B. Mutual Funds
