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WGU Financial-Management Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Risk and Return | 12% | - Systematic vs unsystematic risk - Portfolio risk and diversification - Beta and Capital Asset Pricing Model |
| Capital Budgeting | 10% | - Cash flow estimation and project evaluation - NPV, IRR, payback period, profitability index |
| Financial Markets and Corporate Objectives | 15% | - Goal of the firm: shareholder wealth maximization - Types of financial markets and instruments - Role of financial institutions |
| Capital Structure and Financing | 10% | - Leverage and cost of capital - Dividend policy and payout decisions |
| Time Value of Money | 18% | - Discounted cash flow valuation - Effective vs nominal interest rates - Present value, future value, annuities, perpetuities |
| Valuation of Securities | 15% | - Cost of capital components - Bond valuation, yield to maturity, risk characteristics - Stock valuation: dividend growth model, CAPM |
| Financial Statement Analysis | 20% | - Common-size and trend analysis - Income statement, balance sheet, cash flow statement - Ratio analysis: liquidity, profitability, solvency, efficiency |
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 necessitates strategies to mitigate potential losses from instability or unfavorable policies.
C) It only affects firms with domestic operations facing international competition.
D) It reduces the complexity of international investments.
2. What is the relationship between the length of the cash cycle and the amount of cash a firm needs to operate?
A) Companies must keep more cash on hand if they maintain a longer cash cycle.
B) The cash cycle length has no impact on operational cash needs.
C) A longer cash cycle reduces the need for operational cash due to increased efficiency.
D) Shorter cash cycles require more cash to handle rapid transactions.
3. What is a function of the Financial Industry Regulatory Authority (FINRA)?
A) Managing federal monetary policy
B) Issuing currency
C) Insuring bank deposits
D) Regulating brokerage firms
4. Alliah Company produces vaccines at its pharmaceutical facility near a river. It is considering expanding its operations by building a second facility next to the first. The company holds a public hearing to discuss an extra investment it will make to minimize pollution and keep the river clean and thriving for the native wildlife.
How does this effort support the overall goal of the firm?
A) Alliah Company is seeking to focus initially on maximizing value to the shareholders-or owners-of the firm, and the extra costs to prevent pollution will increase the immediate earnings available for owners.
B) Alliah Company is considering the long-term impact on shareholder value and the company ' s social responsibility to all stakeholders-including the environment and local community.
C) Alliah Company is ensuring this action will reduce immediate costs to maximize employee engagement and earnings-because the ultimate goal of a company is employee-oriented.
D) Alliah Company is focusing on consumers first and foremost to create the greatest value for the company. Reducing this pollution will directly improve the quality of products the company creates.
5. During the last year, Kretsmatt had the following cash flows:
* The firm had sales of $20,000 and net income of $5,000. Dividends of $1,000 were paid, and there were no changes to working capital accounts.
* The company purchased new equipment for $3,000. There were no sales of equipment and no depreciation expense recorded during the year.
* The company raised no funds through external financing and repaid no debt.
How much were Kretsmatt's net cash flows from financing for the year?
A) The firm's net cash flows from financing were an outflow of $1,000.
B) The firm's net cash flows from financing were an inflow of $5,000.
C) The firm's net cash flows from financing were an inflow of $4,000.
D) The firm's net cash flows from financing were an outflow of $3,000.
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: A | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: A |

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