WGU - C214 Missed Questions with
complete solution 2025/2026
1. To evaluate a non-public company, what (c.) The PE of a
sources would you use? compara-ble public
company.
(a.) The financial statements filed with the
SEC. (b.) The latest stock price quoted in the
Wall Street Journal.
(c.) The PE of a comparable public company.
(d.) The book value of equity inn its balance sheet.
2. What explains the size of the yield spread of
bonds over Treasury?
(a.) The investor-perceived riskiness of the bond. (a.) The investor-perceived
(b.) The firm's ROE. riskiness of the bond.
(c.) The firm's efficiency ratio.
(d.) The firm's beta.
3. If market interest rates rise, what impact does it
have on a given bond?
(a.) Its price decreases.
(b.) It will have a discount price. (a.) Its price decreases.
(c.) No impact since the coupon rate is
fixed. (d.) Its price increases.
4. What impact did the recent corporate tax cut
have on a firm's WACC?
(a.) It decreased WACC
(b.) It increased WACC
(c.) No impact since WACC depend on firm
risk. (d.) None of the above. (b.) It increased WACC.
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9
, WGU - C214 Missed Questions
5. If debt is less costly than equity, why don't firms
max-imize debt use? (a.) Excessive debt
in-creases risk of
(a.) Excessive debt increases risk of bankruptcy.
(b.) Restricted by Federal tax regulations. bankruptcy.
(c.) It reduces financial leverage.
(d.) It increases financial leverage.
6. If the yield of a bond is higher than the coupon
rate, what is the price?
(a.) Premium price
(b.) Par price
(c.) Discount price
(c.) Discount price
(d.) Secondary market price
7. Firms using different valuation methods is an example (d.) An accounting
ditter-
of what? ence
(a.) Timing issue (b.)
Seasonal effect
(c.) Interpretation error
(d.) An accounting difference
8. The value of a corporation is best measured
by: (c.) Market price
(a.) Total assets
(b.) Assets minus liabilities on the balance sheet.
(c.) Market price
(d.) Its book value
9. The interest rate on a corporate bond does not reflect: (c.) Face value
(a.) Risk
2/
9
complete solution 2025/2026
1. To evaluate a non-public company, what (c.) The PE of a
sources would you use? compara-ble public
company.
(a.) The financial statements filed with the
SEC. (b.) The latest stock price quoted in the
Wall Street Journal.
(c.) The PE of a comparable public company.
(d.) The book value of equity inn its balance sheet.
2. What explains the size of the yield spread of
bonds over Treasury?
(a.) The investor-perceived riskiness of the bond. (a.) The investor-perceived
(b.) The firm's ROE. riskiness of the bond.
(c.) The firm's efficiency ratio.
(d.) The firm's beta.
3. If market interest rates rise, what impact does it
have on a given bond?
(a.) Its price decreases.
(b.) It will have a discount price. (a.) Its price decreases.
(c.) No impact since the coupon rate is
fixed. (d.) Its price increases.
4. What impact did the recent corporate tax cut
have on a firm's WACC?
(a.) It decreased WACC
(b.) It increased WACC
(c.) No impact since WACC depend on firm
risk. (d.) None of the above. (b.) It increased WACC.
1/
9
, WGU - C214 Missed Questions
5. If debt is less costly than equity, why don't firms
max-imize debt use? (a.) Excessive debt
in-creases risk of
(a.) Excessive debt increases risk of bankruptcy.
(b.) Restricted by Federal tax regulations. bankruptcy.
(c.) It reduces financial leverage.
(d.) It increases financial leverage.
6. If the yield of a bond is higher than the coupon
rate, what is the price?
(a.) Premium price
(b.) Par price
(c.) Discount price
(c.) Discount price
(d.) Secondary market price
7. Firms using different valuation methods is an example (d.) An accounting
ditter-
of what? ence
(a.) Timing issue (b.)
Seasonal effect
(c.) Interpretation error
(d.) An accounting difference
8. The value of a corporation is best measured
by: (c.) Market price
(a.) Total assets
(b.) Assets minus liabilities on the balance sheet.
(c.) Market price
(d.) Its book value
9. The interest rate on a corporate bond does not reflect: (c.) Face value
(a.) Risk
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9
