WGU Financial-Management Actual Free Exam Questions & Community Discussion

Exam Code/Number: Financial-Management
Exam Name/Title: WGU Financial Management VBC1
Certification Provider: WGU
Corresponding Certification: Courses and Certificates

Exam Questions: 86
Updated On: May 31, 2026

Question #10

In the capital asset pricing model (CAPM), what does a beta (#) greater than 1 signify for a portfolio?

A. The portfolio will always outperform the market.

B. The portfolio has more risk than the market.

C. The portfolio is expected to move in the opposite direction of the market.

D. The portfolio has less risk than the market.

Discussion 0

Correct Answer: B Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #11

What is a limitation of historical mean returns when estimating the cost of common equity?

A. They are difficult to calculate.

B. They apply only to large, established companies.

C. They ignore market conditions and future prospects.

D. They require prediction of future dividends.

Discussion 0

Correct Answer: C Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #12

What distinguishes a subordinated debenture from a senior debenture?

A. A subordinated debenture has a higher claim on assets in the event of liquidation.

B. A subordinated debenture is secured with collateral.

C. A subordinated debenture has a lower claim on assets in the event of liquidation.

D. A subordinated debenture is issued in a foreign currency.

Discussion 0

Correct Answer: C Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #13

Considering the fundamental relationships of the balance sheet, how can a company's assets increase without a corresponding rise in liabilities?

A. The company could increase the amount of depreciation it recognizes.

B. The company could finance the assets by restructuring its long-term debt.

C. The company could finance the assets by increasing owners' equity.

D. The company could increase the amount of cash it pays out as dividends.

Discussion 0

Correct Answer: C Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #14

What is the relationship between the length of the cash cycle and the amount of cash a firm needs to operate?

A. Shorter cash cycles require more cash to handle rapid transactions.

B. Companies must keep more cash on hand if they maintain a longer cash cycle.

C. The cash cycle length has no impact on operational cash needs.

D. A longer cash cycle reduces the need for operational cash due to increased efficiency.

Discussion 0

Correct Answer: B Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #15

How does company size relate to capital structure in terms of access to financing options?

A. Larger companies are more reliant on internal financing.

B. Larger firms often have broader access to both debt and equity markets.

C. Smaller companies are better able to access lower costs of capital for debt.

D. Smaller firms have better access to secured loans.

Discussion 0

Correct Answer: B Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #16

Why must analysts be cautious about accounting practices when analyzing ratios?

A. Because ratio analysis follows a fixed rule set that eliminates judgment

B. Because different firms may use varying accounting methods, affecting the comparability of ratios

C. Because accounting practices are identical across all firms

D. Because accrual accounting rules eliminate any variation in reported results

Discussion 0

Correct Answer: B Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #17

In the statement of cash flows, how should an increase in accounts receivable be treated when calculating cash collected from customers?

A. It should be added to revenue.

B. It should be subtracted from revenue.

C. It should be added to the cost of goods sold.

D. It should be subtracted from cost of goods sold.

Discussion 0

Correct Answer: B Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Question #18

What is a primary goal of managing accounts receivable through credit policies?

A. To balance customer convenience with the firm's cash flow needs

B. To transition all sales to cash-only transactions

C. To maximize sales regardless of cash flow impact

D. To eliminate accounts receivable entirely

Discussion 0

Correct Answer: A Vote an answer

Explanation: Only visible for EduDump members. You can sign-up / login (it's free).

Download Free WGU Financial-Management Demo

Simply submit your e-mail address below to get started with our free demo of your WGU Financial-Management exam.