100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
(WGU D076) ECON 2040 - Finance Skills for Managers - OA Guide $12.49   Add to cart

Case

(WGU D076) ECON 2040 - Finance Skills for Managers - OA Guide

 4 views  0 purchase

(WGU D076) ECON 2040 - Finance Skills for Managers - OA Guide (WGU D076) ECON 2040 - Finance Skills for Managers - OA Guide (WGU D076) ECON 2040 - Finance Skills for Managers - OA Guide

Preview 3 out of 23  pages

  • September 2, 2024
  • 23
  • 2024/2025
  • Case
  • Unknown
  • Unknown
All documents for this subject (12)
avatar-seller
ClementeO
D076 ECON 2040



Finance Skills for Managers




OBJECTIVE ASSESSMENT GUIDE




© WGU 2024/2025

,1. Which of the following best describes the concept of the cost of
capital?
- A) The interest rate paid on a company's debt
- B) The weighted average cost of a company's debt and equity
financing
- C) The required return for equity investors
- D) The firm’s total annual revenue


Answer: B
Rationale: The cost of capital refers to the weighted average
cost of a company’s funding sources, including stock, bonds, and
other forms of debt.


2. When assessing the value of an investment, which of the
following models involves discounting future cash flows back to a
present value?
- A) Payback Period
- B) Discounted Cash Flow (DCF)
- C) Internal Rate of Return (IRR)
- D) Post-payback Period


Answer: B
© WGU 2024/2025

, Rationale: The DCF model involves estimating the future cash
flows from an investment and discounting them to determine their
present value.


3. Which financial metric is most effective in evaluating
profitability by comparing net profit to shareholders' equity?
- A) Return on Assets (ROA)
- B) Net Profit Margin
- C) Earnings Before Interest and Taxes (EBIT)
- D) Return on Equity (ROE)


Answer: D
Rationale: ROE measures profitability by comparing net profit
to shareholders' equity, indicating how effectively equity is being
used.


4. What does the Modigliani-Miller Theorem primarily state
about the capital structure in a perfect market?
- A) Companies should finance entirely with debt
- B) The value of a company is unaffected by its capital structure
- C) Equity financing is more beneficial than debt financing
- D) Dividend policy significantly affects company valuation

© WGU 2024/2025

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

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

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

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 ClementeO. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $12.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

67096 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$12.49
  • (0)
  Add to cart