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WGU Financial-Management Exam Syllabus Topics:

SectionObjectives
Topic 1: Financial Management Concepts- Financial Markets and Institutions
  • 1. Financial Markets
  • 2. Interest Rate Levels
  • 3. Financial Institutions
- Financial Environment
  • 1. Agency Problem and Corporate Governance
  • 2. Forms of Business Organization
  • 3. Objectives of the Financial Manager
Topic 2: Capital Budgeting- Decision Criteria
  • 1. Internal Rate of Return (IRR)
  • 2. Net Present Value (NPV)
  • 3. Payback Period
  • 4. Modified IRR (MIRR)
- Cash Flow Estimation
  • 1. Incremental Cash Flows
  • 2. Depreciation Methods
Topic 3: Cost of Capital and Capital Structure- Cost of Capital
  • 1. Cost of Equity (CAPM, DCF)
  • 2. Cost of Debt
  • 3. Weighted Average Cost of Capital (WACC)
- Leverage and Capital Structure
  • 1. Operating Leverage
  • 2. Financial Leverage
  • 3. Optimal Capital Structure
Topic 4: Working Capital Management- Current Asset Management
  • 1. Receivables Management
  • 2. Inventory Management
  • 3. Cash Management
- Current Liabilities Management
  • 1. Trade Credit
  • 2. Short-term Financing
Topic 5: Financial Statement Analysis- Ratio Analysis
  • 1. Liquidity Ratios
  • 2. Profitability Ratios
  • 3. Debt Management Ratios
  • 4. Market Value Ratios
  • 5. Asset Management Ratios
- Financial Statement Basics
  • 1. Income Statement
  • 2. Statement of Cash Flows
  • 3. Balance Sheet
Topic 6: Time Value of Money- Bond and Stock Valuation
  • 1. Valuation of Preferred Stock
  • 2. Valuation of Bonds
  • 3. Valuation of Common Stock
- Present and Future Value
  • 1. Present Value of a Lump Sum
  • 2. Future Value of a Lump Sum
  • 3. Annuities (Ordinary and Due)

WGU Financial Management VBC1 Sample Questions:

Question #1

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 cash it pays out as dividends.
  • B. The company could increase the amount of depreciation it recognizes.
  • C. The company could finance the assets by increasing owners' equity.
  • D. The company could finance the assets by restructuring its long-term debt.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Question #2

Why might tax expense on the income statement not reflect the actual taxes paid by a firm?

  • A. Because there are differences between tax and accrual accounting rules
  • B. Because all tax expenses on the income statement accurately reflect taxes paid
  • C. Because tax expenses are always deferred to the next fiscal year
  • D. Because tax expense is never an estimation and not based on real figures
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Correct Answer: A  🗳️

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Question #3

A company is looking to invest in new machinery that will enhance overall efficiency. The projected assets needed for the project are $590,000, the projected liabilities are $431,000, and the projected equity is $49,000.
What is the discretionary financing need (DFN)?

  • A. $10,000
  • B. $159,000
  • C. $382,000
  • D. $110,000
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Correct Answer: D  🗳️

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Question #4

What distinguishes a subordinated debenture from a senior debenture?

  • A. A subordinated debenture has a lower claim on assets in the event of liquidation.
  • B. A subordinated debenture is issued in a foreign currency.
  • C. A subordinated debenture is secured with collateral.
  • D. A subordinated debenture has a higher claim on assets in the event of liquidation.
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Correct Answer: A  🗳️

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Question #5

How does the use of historical returns to estimate the cost of common equity differ from the Gordon growth model?

  • A. It considers the future growth rate of dividends.
  • B. It is based on past stock performance.
  • C. It focuses on the company's dividend policy.
  • D. It uses market risk as the primary factor.
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Correct Answer: B  🗳️

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