WGU C214 Financial Management Final Exam Prep 2025/2026 | Actual Questions & Verified Answers | Latest Objective Assessment (OA) Guide

2026 GRADED A+ EXAM




WGU C214 Financial Mgmt ACTUAL QUESTIONS AND WELL
REVISED ANSWERS - LATEST AND COMPLETE UPDATE WITH
VERIFIED SOLUTIONS 2026


Characteristics of preferred stock includes - CORRECT ANSWER
-dividends in arrears
-dividends are cumulative
-higher payoff claim in a BK (has first dibs in a BK)
-considered "hybrid" (part stock/part bond)
-no fixed maturity date
-no voting rights
-can skip dividend payments
-dividends don't change year-after-year
-used in start ups (IPO)


QUESTION : Preferred stock dividends - CORRECT ANSWER
can go without payment and pay in arrears the following year


QUESTION : Characteristics of common stock are - CORRECT
ANSWER -voting rights
-no maturity date
-corporate governance
-lower payoff claim in BK
-variable returns

,2026 GRADED A+ EXAM

-unlimited earnings potential
-earnings are in dividends & the increase in price of stock


QUESTION : New start up ventures often issue - CORRECT
ANSWER preferred stock (in an IPO)


QUESTION : What stock is considered a hybrid - CORRECT
ANSWER preferred stock


QUESTION : One thing common stock and preferred stock have in
common is - CORRECT ANSWER both have no maturity date


QUESTION : Which type of security has voting rights - CORRECT
ANSWER common stock


QUESTION : Debt covenants and restrictions help to ensure that -
CORRECT ANSWER management is meeting bond and
shareholder expectations
NOTE: covenants are promises meant to be kept


QUESTION : What is true regarding bonds - CORRECT ANSWER
-when bond matures, bondholder gets lump sum back
-coupon rate doesn't change
-maturity is in years
-PAR value is typically $1000
-Future value (same as PAR) is typically $1000

,2026 GRADED A+ EXAM



QUESTION : Bond sells at face value when - CORRECT ANSWER
required rate of return is equal to the coupon rate


QUESTION : Why are bonds the primary method for raising capital -
CORRECT ANSWER because bonds remove the intermediary
costs
NOTE: IPO's require an intermediary known as a syndicate - a group
of banks underwriting the security issue


QUESTION : What type of bond can be traded for stock - CORRECT
ANSWER convertible bonds


QUESTION : What is the interest rate for annual payments of a bond
known as - CORRECT ANSWER the coupon rate
NOTE: coupon rate is the established interest rate for the life of the
bond and will remain unchanged


QUESTION : Coupon rate is the established rate of the bond and
should - CORRECT ANSWER never change


QUESTION : Debentures are - CORRECT ANSWER secured
bonds
NOTE: debentures are a debt instrument (bond) issued to raise cash,
secured against a company's assets and backed by credit,
transferable by the holder, and may also be unsecured

, 2026 GRADED A+ EXAM

QUESTION : Secured loan - CORRECT ANSWER has collateral
like a mortgage


QUESTION : The amount repaid at the expiration date of a bond is -
CORRECT ANSWER PAR value
NOTE: expiration date is also known as maturity date PAR (or Face
Value) is typically $1000


QUESTION : Duration measures - CORRECT ANSWER the
market risk of a bond and is the percentage drop in price caused by a
1% increase in yield (rate)
NOTE: measurement of the drop in price after a rate increase


QUESTION : Maturity of bonds is calculated in - CORRECT
ANSWER years


QUESTION : A bond premium occurs when - CORRECT ANSWER
bonds are issued for an amount greater than their face or maturity
amount; caused by the bonds having a stated interest rate that is
higher than the market interest rate for similar bonds


QUESTION : Junk Bonds are - CORRECT ANSWER high yield
bonds without any stability


QUESTION : "Leveraged" results in - CORRECT ANSWER
having more debt (bonds) than equity (stock) and lower stock prices
NOTE: recall that debt is safer and levels out risk in a portfolio