1 for specific request mail
WGU C214 Financial Mgmt Pass the OA Questions
and Correct Answers | Latest Update
Characteristics of preferred stock includes Ans: -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
Assignment Expert
-no voting rights
Guru01 - Stuvia
-can skip dividend payments
-dividends don't change year-after-year
-used in start ups (IPO)
2026
Preferred stock dividends Ans: can go without payment and pay in
arrears the following year
©
Characteristics of common stock are Ans: -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 Ans: preferred stock (in an IPO)
, 2 for specific request mail
What stock is considered a hybrid Ans: preferred stock
One thing common stock and preferred stock have in common is Ans:
both have no maturity date
Which type of security has voting rights Ans: common stock
Debt covenants and restrictions help to ensure that Ans: management is
meeting bond and shareholder expectations
NOTE: covenants are promises meant to be kept
What is true regarding bonds Ans: -when bond matures, bondholder gets
Assignment Expert
lump sum back
Guru01 - Stuvia
-coupon rate doesn't change
-maturity is in years
-PAR value is typically $1000
2026
-Future value (same as PAR) is typically $1000
©
Bond sells at face value when Ans: required rate of return is equal to the
coupon rate
Why are bonds the primary method for raising capital Ans: because
bonds remove the intermediary costs
NOTE: IPO's require an intermediary known as a syndicate - a group of
banks underwriting the security issue
What type of bond can be traded for stock Ans: convertible bonds
What is the interest rate for annual payments of a bond known as Ans:
the coupon rate
NOTE: coupon rate is the established interest rate for the life of the bond
and will remain unchanged
, 3 for specific request mail
Coupon rate is the established rate of the bond and should Ans: never
change
Debentures are Ans: secured bonds
NOTE: debentures are a debt instrument (bond) issued to raise cash,
secured against a company's assets and backed by credit, transferable by
the holder, and may also be unsecured
Secured loan Ans: has collateral like a mortgage
The amount repaid at the expiration date of a bond is Ans: PAR value
Assignment Expert
NOTE: expiration date is also known as maturity date PAR (or Face Value)
is typically $1000
Guru01 - Stuvia
Duration measures Ans: the market risk of a bond and is the percentage
drop in price caused by a 1% increase in yield (rate)
NOTE: measurement of the drop in price after a rate increase
2026
Maturity of bonds is calculated in Ans: years
©
A bond premium occurs when Ans: bonds are issued for an amount
greater than their face or maturity amount; caused by the bonds having a
stated interest rate that is higher than the market interest rate for similar
bonds
Junk Bonds are Ans: high yield bonds without any stability
"Leveraged" results in Ans: having more debt (bonds) than equity (stock)
and lower stock prices
NOTE: recall that debt is safer and levels out risk in a portfolio
In current assets, inventory is the Ans: LEAST liquid of current assets
NOTE: current assets take less than 12 months to make liquid
WGU C214 Financial Mgmt Pass the OA Questions
and Correct Answers | Latest Update
Characteristics of preferred stock includes Ans: -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
Assignment Expert
-no voting rights
Guru01 - Stuvia
-can skip dividend payments
-dividends don't change year-after-year
-used in start ups (IPO)
2026
Preferred stock dividends Ans: can go without payment and pay in
arrears the following year
©
Characteristics of common stock are Ans: -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 Ans: preferred stock (in an IPO)
, 2 for specific request mail
What stock is considered a hybrid Ans: preferred stock
One thing common stock and preferred stock have in common is Ans:
both have no maturity date
Which type of security has voting rights Ans: common stock
Debt covenants and restrictions help to ensure that Ans: management is
meeting bond and shareholder expectations
NOTE: covenants are promises meant to be kept
What is true regarding bonds Ans: -when bond matures, bondholder gets
Assignment Expert
lump sum back
Guru01 - Stuvia
-coupon rate doesn't change
-maturity is in years
-PAR value is typically $1000
2026
-Future value (same as PAR) is typically $1000
©
Bond sells at face value when Ans: required rate of return is equal to the
coupon rate
Why are bonds the primary method for raising capital Ans: because
bonds remove the intermediary costs
NOTE: IPO's require an intermediary known as a syndicate - a group of
banks underwriting the security issue
What type of bond can be traded for stock Ans: convertible bonds
What is the interest rate for annual payments of a bond known as Ans:
the coupon rate
NOTE: coupon rate is the established interest rate for the life of the bond
and will remain unchanged
, 3 for specific request mail
Coupon rate is the established rate of the bond and should Ans: never
change
Debentures are Ans: secured bonds
NOTE: debentures are a debt instrument (bond) issued to raise cash,
secured against a company's assets and backed by credit, transferable by
the holder, and may also be unsecured
Secured loan Ans: has collateral like a mortgage
The amount repaid at the expiration date of a bond is Ans: PAR value
Assignment Expert
NOTE: expiration date is also known as maturity date PAR (or Face Value)
is typically $1000
Guru01 - Stuvia
Duration measures Ans: the market risk of a bond and is the percentage
drop in price caused by a 1% increase in yield (rate)
NOTE: measurement of the drop in price after a rate increase
2026
Maturity of bonds is calculated in Ans: years
©
A bond premium occurs when Ans: bonds are issued for an amount
greater than their face or maturity amount; caused by the bonds having a
stated interest rate that is higher than the market interest rate for similar
bonds
Junk Bonds are Ans: high yield bonds without any stability
"Leveraged" results in Ans: having more debt (bonds) than equity (stock)
and lower stock prices
NOTE: recall that debt is safer and levels out risk in a portfolio
In current assets, inventory is the Ans: LEAST liquid of current assets
NOTE: current assets take less than 12 months to make liquid
