WGU D076 Final Exam (2024/ 2025) Finance Skills for Managers Review Questions with Correct Detailed Answers || Already Graded A+ <LATEST VERSION>
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Course
WGU D076
Institution
WGU D076
WGU D076 Final Exam (2024/ 2025)
Finance Skills for Managers Review
Questions with Correct Detailed Answers ||
Already Graded A+ <LATEST VERSION>
Common Stock - ANSWER A type of stock that represents equity in a firm and
confers the right to vote at shareholder meetings.
Compoundin...
WGU D076 Final Exam (2024/ 2025)
Finance Skills for Managers Review
Questions with Correct Detailed Answers ||
Already Graded A+ <LATEST VERSION>
Common Stock - ANSWER ✔ A type of stock that represents equity in a firm and
confers the right to vote at shareholder meetings.
Compounding Interest - ANSWER ✔ The interest on the principal plus the
interest on earned interest.
Compounding - ANSWER ✔ Finding a future value given a present value.
Corporate Bonds - ANSWER ✔ A debt instrument that is issued by a corporation
in order to raise capital.
Corporate Governance - ANSWER ✔ The system of rules, practices, and
processes by which a firm is directed and controlled.
Correlation - ANSWER ✔ The measure of the relationship between two variables
that move in relation to each other.
Cost of Capital - ANSWER ✔ The cost to a firm to use an investor's capital; see
interest rate.
Coupon Rate - ANSWER ✔ The stated interest rate of a bond; also known as
coupon yield.
, Coupon Yield - ANSWER ✔ The stated interest rate of a bond; also known as
coupon rate.
Covenants - ANSWER ✔ Statements in a bond indenture that outline things the
company will obligate itself to do or not do in order to protect bondholders.
Credit Analysts - ANSWER ✔ A commercial bank position with the responsibility
to assess the riskiness of lending to borrowers and determining whether or not
loans should be extended to potential bank clients.
Cross-sectional Analysis - ANSWER ✔ Comparing a firm's financial ratios to
other firms' ratios or industry averages.
Cumulative - ANSWER ✔ A feature of preferred stock specifying that if a
company skips payment of a preferred stock dividend one year, it is still required
to pay that dividend sometime in the future before paying any common dividends.
Current Market Value - ANSWER ✔ What someone would pay right now for an
asset.
Current Ratio - ANSWER ✔ A liquidity ratio found by current assets divided by
current liabilities.
Dealer Market - ANSWER ✔ A secondary market made up of multiple dealers
that hold an inventory of securities and quote prices.
Debt Ratio - ANSWER ✔ A financing ratio found by total liabilities divided by
total assets.
Debt-to-equity Ratio - ANSWER ✔ A financing ratios found by total liabilities
divided by total equity.
Default Risk - ANSWER ✔ The probability of a loss resulting from a borrower's
failure to repay a contractual obligation; also called credit risk.
Default - ANSWER ✔ Failure to meet a debt obligation.
Defensive Assets - ANSWER ✔ Companies or securities with beta less than 1.
,Discount Bond - ANSWER ✔ A bond whose price is below its par value.
Discount Rate - ANSWER ✔ The name for interest rate when used in time value
of money calculations.
Discounting - ANSWER ✔ Finding a present value given a future value.
Discretionary Accounts - ANSWER ✔ Accounts that do not vary automatically
with sales but are left to the discretion of management.
Discretionary Financing Needed (DFN) - ANSWER ✔ The additional financing
needed given a firm's expectations for future growth.
Diversification - ANSWER ✔ The process of "spreading" your money over many
different assets.
Board of Directors - ANSWER ✔ A group of people who jointly supervise the
activities of an organization.
Bond Indenture - ANSWER ✔ A legal contract that governs the relationship
between a firm and its bondholders.
Bondholders - ANSWER ✔ A person who loans a corporation money by buying
debt securities.
Business Finance - ANSWER ✔ An area of finance that deals with sources of
funding, the capital structure of corporations, the actions that managers take to
increase the value of the firm to its owners, and the tools and analysis used to
allocate financial resources.
Cannibalization - ANSWER ✔ The reduction in sales of a company's own
products due to introduction of another similar product.
Capital Asset Pricing Model (CAPM) - ANSWER ✔ A model used to determine
the risk-return relationship for an asset.
, Capital Budgeting Criteria - ANSWER ✔ Metrics and calculations used to
determine whether a project or asset will add value and be a worthwhile
investment.
Capital Budgeting - ANSWER ✔ The process of evaluation and planning for
purchases of long-term assets.
Capital Investment - ANSWER ✔ The sum of money invested in a business to
purchase long-term assets to further its objective of maximizing owner wealth.
Capital Markets - ANSWER ✔ A type of financial market used for long-term
assets that are held for greater than one year.
Capital Structure - ANSWER ✔ The mixture of debt and equity used to finance a
firm.
Capital - ANSWER ✔ A financial asset that can be used by a firm or individual.
Examples of capital may be machinery or cash held by a firm.
Capital-constrained Environment - ANSWER ✔ When a limited amount of funds
are available.
Cash Budgets - ANSWER ✔ A plan for controlling cash inflows and outflows
business to balance income with expenditures.
Cash Management - ANSWER ✔ Managing the day-to-day finance operations of
a firm.
Central Banks - ANSWER ✔ Ensure that a nation's economy remains healthy by
controlling the amount of money circulating in the economy.
Face Value - ANSWER ✔ The sum of money that a corporation promises to pay
at the expiration of a bond; also called par value.
Finance - ANSWER ✔ The study of managing and allocating funds at the
personal or business level.
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