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Free CFA Corporate Issuers Practice Questions & Answers

900 exam-style Corporate Issuers questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.

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Question 301

WACC becomes unreliable when:

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Question 302

Higher operating leverage leads to:

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Question 303

Beta with Cash Holdings Equity beta = 1.0 Cash = 30% of equity value Cash beta = 0 Operating beta?

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Question 304

D/E Levered beta = 1.8 Market D/E = 1.2 Tax = 25% Unlevered beta?

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Question 305

WACC with Preferred Stock Equity = 500 Debt = 300 Preferred = 200 Costs: Equity = 12% Debt (after tax) = 5% Preferred = 8% WACC?

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Question 306

WACC with Hybrid Securities Convertible bond is 60% debt‑like, 40% equity‑like. Cost of debt = 6% Cost of equity = 12% Effective cost?

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Question 307

Real vs Nominal WACC Real WACC = 7% Inflation = 3% Nominal WACC?

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Question 308

EVA with Growing Capital Charge Capital = 2,000 WACC = 9% NOPAT = 260 EVA?

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Question 309

Equity = 1,500 Cost of equity = 12% Net income = 210 Residual income?

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Question 310

Multi‑Stage FCFF FCFF: Year 1 = 150 Year 2 = 180 Year 3 = 210 Terminal growth = 2% WACC = 9% Enterprise value?

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Question 311

EVA Terminal Value EVA next year = 50 Growth = 2% WACC = 8% PV of EVA perpetuity?

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Question 312

Economic Depreciation Replacement cost inflation = 5% Asset cost = 1,000 Life = 10 years Economic depreciation in year 1?

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Question 313

Sales‑to‑Capital and Growth Sales‑to‑capital = 2.0 Reinvestment = 120 Revenue growth?

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Question 314

EVA vs ROIC ROIC = 12% WACC = 10% Capital = 3,000 EVA?

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Question 315

EVA and Firm Value Capital = 4,000 EVA next year = 80 Growth = 2% WACC = 9% Firm value?

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Question 316

WC peg = 120 Actual WC = 150 Adjustment?

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Question 317

Earn‑Out with Discounted Multi‑Year Payments Earn‑out pays: - 30 in year 1 (prob 50%) - 60 in year 2 (prob 30%) - 0 otherwise Discount rate = 10% PV?

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Question 318

Investee sells goods to investor with 40 profit. Investor owns 30%. Half remains in ending inventory. Profit eliminated?

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Question 319

OCI loss of 50. Investor owns 25%. Impact on investor?

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Question 320

Investor owns 10% (FV = 80, carrying value = 60). Buys another 25% and gains significant influence. Gain recognized?

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Question 321

ESG‑Adjusted WACC Base WACC = 9% ESG premium added to cost of equity = 0.8% Equity weight = 60% New WACC?

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Question 322

Carbon Tax Impact on Firm Value Carbon tax = 30 per year Discount rate = 8% Value reduction?

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Question 323

Dynamic Trade‑Off Theory Dynamic trade‑off theory differs from static trade‑off theory primarily because it:

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Question 324

Pecking order theory predicts that firms:

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Question 325

Debt overhang refers to:

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Question 326

A firm has high customer concentration (few large customers). All else equal, its beta is likely:

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Question 327

A firm relies on a single key supplier. This most likely:

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Question 328

A firm’s revenues are highly cyclical. Compared to a defensive firm, its beta is most likely:

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Question 329

WACC with Tax Loss Carryforwards When a firm has large tax loss carryforwards, the effective tax rate in WACC should:

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Question 330

WACC with Capitalized Interest If interest is capitalized (added to asset cost), then for WACC:

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Free CFA Corporate Issuers Practice Questions & Answers

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