, WGU D362 Corporate Finance Exam 1
Review Questions and Answers 100%
Pass | Graded A+
What is corporate finance? - Answer>> What assets a company
should buy
What projects to invest in
How to raise cash to finance these investments
in order to MAINTAIN AND MAXIMIZE ECONOMIC VALUE
Ultimately, the firm must be a __ - Answer>> cash generating
activity
The cash flows from the firm must __ the cash flows from the
financial markets - Answer>> exceed
2 main questions - Answer>> 1. Capital budgeting
2. Capital structure
Capital budgeting decision - Answer>> What long-term
investments should the firm choose?
Fixed Assets
Capital structure decision - Answer>> How should the firm raise
funds for the selected investments
Liabilities and SH Equity
Ultimate goal of financial managers - Answer>> Shareholder
wealth maximization
= maximizing firm value
= maximizing stock price
SH wealth - Answer>> stock price (fluctuates, want to
maximize) * shares outstanding (relatively stable)
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