FINANCIAL MANAGEMENT (C214) EXAM
QUESTIONS AND VERIFIED SOLUTIONS
(guaranteed Success) 2025-2026 EDITION
WESTERN GOVERNORS’ UNIVERSITY
, WGU C214 OA Financial Management Exam Pass Questions and Answers
Updated (2025/2026) (Verified Answers)
Characteristics of preferred stock include:
-dividends in arrears –dividends are cumulative –higher payoff claim in a BK
(has first dibs in a BK) -considered "hybrid" (part stock/part bond) -no fixed
maturity date -no voting rights -can skip dividend payments -dividends don't
change year-after-year -used in start-ups (IPO)
Preferred stock dividends: can go without payment and pay in arrears the
following year.
Characteristics of common stock are: voting rights -no maturity date -
corporate governance -lower payoff claim in BK -variable returns -unlimited
earnings potential -earnings are in dividends & the increase in price of stock
New start-up ventures often issue: preferred stock (in an IPO)
What stock is considered a hybrid? - preferred stock
One thing common stock and preferred stock have in common is: -
both have no maturity date.
Which type of security has voting rights: common stock
Debt covenants and restrictions help to ensure that: Management is
meeting bond and shareholder expectations. NOTE: covenants are promises
meant to be kept.
What is true regarding bonds: Bond matures, bondholder gets lump sum
back -coupon rate doesn't change -maturity is in years -PAR value is typically
$1000. Future value (same as PAR) is typically $1000.
The bond sells at face value when:- Required rate of return is equal to
the coupon rate
QUESTIONS AND VERIFIED SOLUTIONS
(guaranteed Success) 2025-2026 EDITION
WESTERN GOVERNORS’ UNIVERSITY
, WGU C214 OA Financial Management Exam Pass Questions and Answers
Updated (2025/2026) (Verified Answers)
Characteristics of preferred stock include:
-dividends in arrears –dividends are cumulative –higher payoff claim in a BK
(has first dibs in a BK) -considered "hybrid" (part stock/part bond) -no fixed
maturity date -no voting rights -can skip dividend payments -dividends don't
change year-after-year -used in start-ups (IPO)
Preferred stock dividends: can go without payment and pay in arrears the
following year.
Characteristics of common stock are: voting rights -no maturity date -
corporate governance -lower payoff claim in BK -variable returns -unlimited
earnings potential -earnings are in dividends & the increase in price of stock
New start-up ventures often issue: preferred stock (in an IPO)
What stock is considered a hybrid? - preferred stock
One thing common stock and preferred stock have in common is: -
both have no maturity date.
Which type of security has voting rights: common stock
Debt covenants and restrictions help to ensure that: Management is
meeting bond and shareholder expectations. NOTE: covenants are promises
meant to be kept.
What is true regarding bonds: Bond matures, bondholder gets lump sum
back -coupon rate doesn't change -maturity is in years -PAR value is typically
$1000. Future value (same as PAR) is typically $1000.
The bond sells at face value when:- Required rate of return is equal to
the coupon rate
