Free WGU Financial-Management Exam Questions

Become WGU Certified with updated Financial-Management exam questions and correct answers

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Total 84 Questions | Updated On: Aug 03, 2026

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Question 1

A company is expected to pay a dividend of $2 next year, and dividends are expected to grow at 5% per year indefinitely. The required rate of return on the company’s stock is 10%. What is the value of the stock using the Gordon growth model?

A : $15

B : $20

C : $40

D : $61

Answer: C

Question 2

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 has less risk than the market.

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

Answer: B

Question 3

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

A : They are difficult to calculate.

B : They require prediction of future dividends.

C : They ignore market conditions and future prospects.

D : They apply only to large, established companies.

Answer: C

Question 4

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 restructuring its long-term debt.

D : The company could finance the assets by increasing owners’ equity.

Answer: D

Question 5

What is the Securities and Exchange Commission’s (SEC’s) Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system used for?

A : Electronic trading of securities

B : Regulating the Federal Reserve

C : Online filing and retrieval of company filings

D : Insuring deposit accounts

Answer: C

Page: 1 / 17

Total 84 Questions | Updated On: Aug 03, 2026

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