WGU C214

Elements of Financial Statements (8 Questions) Answer Revenue Expenses Income Assets Liabilities Equity Revenue Answer Amount generated by sale of products and services Expenses Answer Amount incurred to manufacture products Income Answer The difference between revenues and expenses Liabilities Answer Amounts owed by the company to others Equity Answer Amounts invested in the company by shareholders Income Statement (recorded in two methods) Answer Accrual Principal = Reve...

1. What does the Foreign Corrupt Practices Act forbid U.S. companies to do Answer Prohibits U.S. firms and individuals from paying bribes to foreign officials to further business deals. 2. What are two basic types of financial instruments Answer Stocks and Bonds 3. What are secondary markets Answer Secondary financial markets are where securities are traded after the initial offering. 4. What do cash flows from operating activities report Answer Operating - day to day operations Investi...

WGU C214 Financial Management questions with correct answers

The goal of the corporation is to: Answer maximize stock price What makes an efficient market? Answer Competitive market, liquidity, transparency What is the relationship between risk and required return? Answer As risk increases, required return increases. What are the 3 main financial statements? Answer Income statement, the Balance Sheet., and the statement of cash flows Which financial statement reflects a POINT in time (not a period in time) Answer Balance sheet What is Reven...

The stock price of a company increases and the market is deemed efficient. What assumption can be made? Answer A new, patented, product was introduced to the market. Which statement is true about how the global market affects the U.S.? Answer Foreign investors and fund managers make decisions based on financial reporting standards developed and financial statements audited overseas. What are secondary Markets? Answer Markets where securities are traded subsequent to the initial offering. ...

Discretionary Financing Needed Formula Answer Discretionary Financing Needed (DFN) = Projected Total Asset - Projected Total Liabilities - Projected Equity Sustainable Growth Rate Formula Answer Sustainable Growth Rate (SGR) = Return on Equity (ROE) X (1-Divided Payout Ratio) Cash Flow from Operating Activities (CFO) Formula Answer Cash Flow from Operating Activities (CFO) = Net Income + Depreciation +/- Decreases/Increases in Current Assets +/- Increase/Decrease in Current Liabilities ...

How can a private firm appropriately maximize shareholder value? Answer By making decisions that keep the control of the business with the owners Why are American regulators focused on international investing in a global marketplace? Answer Because international investing in a global marketplace is the concern of American investors What is one of the two basic types of financial instruments? Answer Bonds If a company outsources the manufacturing of its products to a foreign country, wh...

Characteristics of preferred stock includes 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) Preferred stock dividends Answer can go without payment and pay in arrears the following year Characteristics of common stock are Answer -voting rights...

Corporate Finance Answer focuses on financial decision making by a firms management Investments Answer various types of financial instruments (stocks, bonds, etc) Banking or Financial Institutions Answer make money by paying depositors a smaller interest rate than the interest rate charged to borrowers Treasury Securities Answer generally bonds that are issued by the US government Corporate Bonds Answer firms borrowing from the public