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WGU Financial-Management Exam Syllabus Topics:

SectionObjectives
Cost of Capital and Capital Structure- Leverage and Capital Structure
  • 1. Financial Leverage
  • 2. Operating Leverage
  • 3. Optimal Capital Structure
- Cost of Capital
  • 1. Weighted Average Cost of Capital (WACC)
  • 2. Cost of Debt
  • 3. Cost of Equity (CAPM, DCF)
Financial Management Concepts- Financial Markets and Institutions
  • 1. Interest Rate Levels
  • 2. Financial Institutions
  • 3. Financial Markets
- Financial Environment
  • 1. Forms of Business Organization
  • 2. Agency Problem and Corporate Governance
  • 3. Objectives of the Financial Manager
Working Capital Management- Current Asset Management
  • 1. Cash Management
  • 2. Receivables Management
  • 3. Inventory Management
- Current Liabilities Management
  • 1. Short-term Financing
  • 2. Trade Credit
Financial Statement Analysis- Ratio Analysis
  • 1. Profitability Ratios
  • 2. Asset Management Ratios
  • 3. Liquidity Ratios
  • 4. Debt Management Ratios
  • 5. Market Value Ratios
- Financial Statement Basics
  • 1. Income Statement
  • 2. Balance Sheet
  • 3. Statement of Cash Flows
Time Value of Money- Bond and Stock Valuation
  • 1. Valuation of Preferred Stock
  • 2. Valuation of Bonds
  • 3. Valuation of Common Stock
- Present and Future Value
  • 1. Present Value of a Lump Sum
  • 2. Future Value of a Lump Sum
  • 3. Annuities (Ordinary and Due)
Capital Budgeting- Decision Criteria
  • 1. Net Present Value (NPV)
  • 2. Internal Rate of Return (IRR)
  • 3. Modified IRR (MIRR)
  • 4. Payback Period
- Cash Flow Estimation
  • 1. Incremental Cash Flows
  • 2. Depreciation Methods

WGU Financial Management VBC1 Sample Questions:

1. How does country risk affect global financial management decisions?

A) It is typically considered irrelevant in financial planning since it is unpredictable.
B) It reduces the complexity of international investments.
C) It necessitates strategies to mitigate potential losses from instability or unfavorable policies.
D) It only affects firms with domestic operations facing international competition.


2. What is the earnings yield of a stock with earnings per share (EPS) of $2 and a market price of $40?

A) 5%
B) 50%
C) 20%
D) 89%


3. A start-up company ' s lender is concerned that the company may not be able to meet its financial obligations.
It asks the company to provide it with information regarding its current assets and current liabilities.
Which information would the start-up company need to provide to the lender?

A) Investments that the firm plans to hold for more than one year
B) Depreciation of equipment the firm uses for its daily operations
C) Long-term debt obligations payable to the bank
D) Obligations that require cash within the next year


4. To answer this question, refer to the cash flow worksheet and the internal rate of return (IRR) calculations.
The hospital is only interested in accepting projects with an IRR that exceeds 11%. Assuming the hospital has sufficient capital for both projects and is willing to invest for up to 10 years, which project(s) would the hospital accept?

A) Project A
B) Neither Project A nor Project B
C) Both Project A and Project B
D) Project B


5. A start-up company ' s lender is concerned that the company may not be able to meet its financial obligations.
It asks the company to provide it with information regarding its current assets and current liabilities.
Which information would the start-up company need to provide to the lender?

A) Investments that the firm plans to hold for more than one year
B) Depreciation of equipment the firm uses for its daily operations
C) Long-term debt obligations payable to the bank
D) Obligations that require cash within the next year


Solutions:

Question # 1
Answer: C
Question # 2
Answer: A
Question # 3
Answer: D
Question # 4
Answer: C
Question # 5
Answer: D

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