C214 Final Exam Questions and
answers rated A+ 2026
Coupon Rate - correct answer ✔The interest rate that a company promises to pay on bonds
Market Rate - correct answer ✔The interest rate on other comparable bonds
Par Value - correct answer ✔The amount payable on maturity of the bond
Market rate - correct answer ✔Same as YTM - Yield to Maturity
Gordon Growth Model - correct answer ✔Assumes stable growth rates and does not incorporate risk
CAPM Model - correct answer ✔Allows to determine expected return on stocks and incorporates risk
How do public companies maximize shareholder value? - correct answer ✔By maximizing Earnings Per
Share
How do private companies maximize shareholder value? - correct answer ✔By keeping control within
the company
Positive credit rating has what effect on capital? - correct answer ✔Lowers cost of capital
What is cash flow from operating activities? - correct answer ✔It is cash flow generated for sale of
products and services
, What is the formula for retained earnings? - correct answer ✔Ending retained earnings=Beginning
retained earnings + Net Income = Dividends
Is depreciation and salvage value on an asset precise or is it an estimate? - correct answer ✔It is an
estimate
What is an example of accounting difference - correct answer ✔Companies using different accounting
methods
What is an example of a timing difference? - correct answer ✔Companies using different fiscal years
Do stock holders or bond holders have voting rights? - correct answer ✔Stock holders have voting
rights
What factors are considered for the initial outlay of a new investment? - correct answer ✔Purchase
price of new equipment, shipping costs, and investment in working capital
What is the risk associated with debt financing? - correct answer ✔Too much debt can lead to
bankruptcy
What are inventory related costs? - correct answer ✔Product costs, storage costs, and opportunity
costs
What statements are required to be filed with the SEC - correct answer ✔Annual audited financial
statements
What are the issues with understanding foreign financial statements? - correct answer ✔Foreign
financial statements use international financial reporting standards and they are different from US
accounting standards
answers rated A+ 2026
Coupon Rate - correct answer ✔The interest rate that a company promises to pay on bonds
Market Rate - correct answer ✔The interest rate on other comparable bonds
Par Value - correct answer ✔The amount payable on maturity of the bond
Market rate - correct answer ✔Same as YTM - Yield to Maturity
Gordon Growth Model - correct answer ✔Assumes stable growth rates and does not incorporate risk
CAPM Model - correct answer ✔Allows to determine expected return on stocks and incorporates risk
How do public companies maximize shareholder value? - correct answer ✔By maximizing Earnings Per
Share
How do private companies maximize shareholder value? - correct answer ✔By keeping control within
the company
Positive credit rating has what effect on capital? - correct answer ✔Lowers cost of capital
What is cash flow from operating activities? - correct answer ✔It is cash flow generated for sale of
products and services
, What is the formula for retained earnings? - correct answer ✔Ending retained earnings=Beginning
retained earnings + Net Income = Dividends
Is depreciation and salvage value on an asset precise or is it an estimate? - correct answer ✔It is an
estimate
What is an example of accounting difference - correct answer ✔Companies using different accounting
methods
What is an example of a timing difference? - correct answer ✔Companies using different fiscal years
Do stock holders or bond holders have voting rights? - correct answer ✔Stock holders have voting
rights
What factors are considered for the initial outlay of a new investment? - correct answer ✔Purchase
price of new equipment, shipping costs, and investment in working capital
What is the risk associated with debt financing? - correct answer ✔Too much debt can lead to
bankruptcy
What are inventory related costs? - correct answer ✔Product costs, storage costs, and opportunity
costs
What statements are required to be filed with the SEC - correct answer ✔Annual audited financial
statements
What are the issues with understanding foreign financial statements? - correct answer ✔Foreign
financial statements use international financial reporting standards and they are different from US
accounting standards
