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WGU C214 Financial Mgmt Pass the OA Questions & Answers.
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WGU C214 Financial Mgmt Pass the OA Questions & Answers.
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WGU C214 Financial Mgmt Pass the OAQuestions & Answers
Characteristics gof gpreferred gstock gincludes g- gANS--dividends gin garrears
-dividends gare gcumulative
-higher gpayoff gclaim gin ga gBK g(has gfirst gdibs gin ga gBK)
-considered g"hybrid" g(part gstock/part gbond)
-no gfixed gmaturity gdate
-no gvoting grights
-can gskip gdividend gpayments
-dividends gdon't gchange gyear-after-year
-used gin gstart gups g(IPO)
Preferred gstock gdividends g- gANS-can ggo gwithout gpayment gand gpay gin garrears gthe
gfollowing gyear
Characteristics gof gcommon gstock gare g- gANS--voting grights
-no gmaturity gdate
-corporate ggovernance
-lower gpayoff gclaim gin gBK
-variable greturns
-unlimited gearnings gpotential
-earnings gare gin gdividends g& gthe gincrease gin gprice gof gstock
New gstart gup gventures goften gissue g- gANS-preferred gstock g(in gan gIPO)
What gstock gis gconsidered ga ghybrid g- gANS-preferred gstock
One gthing gcommon gstock gand gpreferred gstock ghave gin gcommon gis g- gANS-both ghave
gno gmaturity gdate
Which gtype gof gsecurity ghas gvoting grights g- gANS-common gstock
Debt gcovenants gand grestrictions ghelp gto gensure gthat g- gANS-management gis gmeeting
gbond gand gshareholder gexpectations
NOTE: gcovenants gare gpromises gmeant gto gbe gkept
What gis gtrue gregarding gbonds g- gANS--when gbond gmatures, gbondholder ggets glump
gsum gback
-coupon grate gdoesn't gchange
-maturity gis gin gyears
, -PAR gvalue gis gtypically g$1000
-Future gvalue g(same gas gPAR) gis gtypically g$1000
Bond gsells gat gface gvalue gwhen g- gANS-required grate gof greturn gis gequal gto gthe gcoupon
grate
Why gare gbonds gthe gprimary gmethod gfor graising gcapital g- gANS-because gbonds gremove
gthe gintermediary gcosts
NOTE: gIPO's grequire gan gintermediary gknown gas ga gsyndicate g- ga ggroup gof gbanks
gunderwriting gthe gsecurity gissue
What gtype gof gbond gcan gbe gtraded gfor gstock g- gANS-convertible gbonds
What gis gthe ginterest grate gfor gannual gpayments gof ga gbond gknown gas g- gANS-the
gcoupon grate
NOTE: gcoupon grate gis gthe gestablished ginterest grate gfor gthe glife gof gthe gbond gand gwill
gremain gunchanged
Coupon grate gis gthe gestablished grate gof gthe gbond gand gshould g- gANS-never gchange
Debentures gare g- gANS-secured gbonds
NOTE: gdebentures gare ga gdebt ginstrument g(bond) gissued gto graise gcash, gsecured
gagainst ga gcompany's gassets gand gbacked gby gcredit, gtransferable gby gthe gholder, gand
gmay galso gbe gunsecured
Secured gloan g- gANS-has gcollateral glike ga gmortgage
The gamount grepaid gat gthe gexpiration gdate gof ga gbond gis g- gANS-PAR gvalue
NOTE: gexpiration gdate gis galso gknown gas gmaturity gdate gPAR g(or gFace gValue) gis
gtypically g$1000
Duration gmeasures g- gANS-the gmarket grisk gof ga gbond gand gis gthe gpercentage gdrop gin
gprice gcaused gby ga g1% gincrease gin gyield g(rate)
NOTE: gmeasurement gof gthe gdrop gin gprice gafter ga grate gincrease
Maturity gof gbonds gis gcalculated gin g- gANS-years
A gbond gpremium goccurs gwhen g- gANS-bonds gare gissued gfor gan gamount ggreater gthan
gtheir gface gor gmaturity gamount; gcaused gby gthe gbonds ghaving ga gstated ginterest grate
gthat gis ghigher gthan gthe gmarket ginterest grate gfor gsimilar gbonds
Junk gBonds gare g- gANS-high gyield gbonds gwithout gany gstability
"Leveraged" gresults gin g- gANS-having gmore gdebt g(bonds) gthan gequity g(stock) gand
glower gstock gprices
NOTE: grecall gthat gdebt gis gsafer gand glevels gout grisk gin ga gportfolio
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