WGU C214 OA Financial Management Exam Questions and Answers (2024 / 2025) | 100% Correct Verified Answers Grade A+
8 views 0 purchase
Course
WGU C214 OA Financial Management
Institution
WGU C214 OA Financial Management
WGU C214 OA Financial Management Exam Questions and Answers (2024 / 2025) | 100% Correct Verified Answers Grade A+
1) How does a good credit rating from S&P and Moody's affect the firm? - CORRECT Lowers the cost of financing. a credit downgrade increases the cost of financing
2) If a firm's r...
WGU C214 OA Financial Management Exam
Questions and Answers () | 100%
Correct Verified Answers Grade A+
1) How does a good credit rating from S&P and Moody's affect the firm? -
CORRECT Lowers the cost of financing. a credit downgrade increases the cost
of financing
2) If a firm's risk-return line is above the market risk-return line, what happens? -
CORRECT The firm's stock price will increase to reduce it expected return to the
market level
3) Which will be larger: accrual taxes payable or accounting income tax expense -
CORRECT Accounting tax expense will be higher; actual taxes based on IRS
rules will be lower
4) Which financial ratios measure "efficiency"? - CORRECT Asset turnover and
Fixed Asset turnover
5) Which ratio is the best measure of a firm's ability to pay bills? - CORRECT Quick
Ratio
6) Which decision requires using subjective estimates? - CORRECT Economic life
of a new asset
7) What is the yield to maturity on a bond? - CORRECT The return earned from the
purchase date to maturity
8) If a firm buys a 30-day CD, where is it carried on the balance sheet? -
CORRECT Cash and ST in current assets
9) How does a "prudent investor" select investments? - CORRECT Seeks the
highest return for "reasonable" amount of risk
10) What is the difference between WACC and CAPM's required return? -
CORRECT CAPM includes only equity required return; WACC includes debt
and equity
11) What do points on the Efficient Frontier measure? - CORRECT The maximum
return for a given level of risk; maximum Return-to-risk ratio
12) What is Beta? - CORRECT Measure of volatility of a stock's risk relative to the
market
This study source was downloaded by 100000888206670 from CourseHero.com on 08-26-2024 12:12:30 GMT -05:00
, 13) Why are accurate forecasts important? - CORRECT Plan for resources to
support sales
14) Which leverage measure shows the impact of EBIT changes on pre-tax profit
(EBT)? - CORRECT Financial leverage
15) Which ratios are used in working capital management? - CORRECT Cash ratio,
Current ratio - ratios containing current assets and/or current liabilities
16) Which ratio is used for valuing a private company? - CORRECT Price-to-
earnings (PE) ratio
17) What are the 4 costs associated with holding inventory? - CORRECT Product,
storage, holding, and opportunity
18) What risk is eliminated by a diversified portfolio? - CORRECT Idiosyncratic risk -
risk affecting a single firm
19) What is the "secondary" market? - CORRECT Investors trading securities
among themselves after initial issuance of securities
20) What are impacts of outsourcing? - CORRECT Fewer jobs and lower priced
products
21) What are the impacts of tariffs? - CORRECT Protects inefficient firms and
employees; higher product costs for consumers
22) Which item is transferred from the income statement to the balance sheet? -
CORRECT Depreciation expense
23) If two companies use different inventory valuation methods, what is this called? -
CORRECT An "accounting difference"
24) What securities are exempt from federal income taxation? -
CORRECT Municipal bonds
25) Why would a firm prefer to issue debt rather than stock? - CORRECT Deb has a
lower required return; debt interest is tax deductible; avoids dilution of ownership
26) What happens to APY as the number of interest payment periods per year
increase? - CORRECT APY increases
27) What is the present value of future cash flows of a stock called? -
CORRECT Intrinsic Value
This study source was downloaded by 100000888206670 from CourseHero.com on 08-26-2024 12:12:30 GMT -05:00
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller kiarienaomi88. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
