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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 211

Cost of equity drops from 12% → 10% FCF = 250 Growth = 2% Value increase?

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Question 212

Environmental liability = 50 per year Discount = 8% PV?

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Question 213

Margin ↑ from 10% → 11% Revenue = 4,000 Profit improvement?

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Question 214

Local vs Global CAPM A firm operates only in a segmented emerging market. Which model is most appropriate for its cost of equity?

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Question 215

Sovereign Ceiling Corporate standalone rating = A. Sovereign rating = BBB. Under a strict sovereign ceiling, the corporate’s effective rating is:

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Question 216

Build‑Up Model – Private Company Risk‑free = 3%, equity risk premium = 5%, size premium = 3%, company‑specific premium = 2%. Cost of equity?

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Question 217

Marginal Cost of Capital Breakpoint Target capital structure: 60% equity, 40% debt. Retained earnings available = 300. At what total new capital does the marginal cost of capital increase?

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Question 218

APV – Concept Adjusted Present Value (APV) is best described as:

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Question 219

APV – Numerical Unlevered project value = 800. PV of tax shields = 120. PV of issuance costs = –20. APV?

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Question 220

Sales‑to‑Capital Ratio Sales = 2,000, invested capital = 800. Sales‑to‑capital ratio?

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Question 221

Mid‑Year Discounting A project generates 100 per year for 5 years. Discount rate = 10%. Using mid‑year convention, approximate PV?

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Question 222

Debt = 500, interest rate = 6%, tax rate = 25%, discount rate for tax shield = 6%. PV of perpetual tax shield?

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Question 223

D/E If a firm maintains a constant D/E ratio, the appropriate discount rate for tax shields is:

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Question 224

Earn‑Out – Purpose The primary purpose of an earn‑out in M&A is to:

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Question 225

Deferred Tax Liability from Write‑Up PPE book value = 300, fair value = 420, tax base = 300, tax rate = 25%. Deferred tax liability?

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Question 226

A firm with excess cash and low growth raises its dividend. Under agency theory, this is best seen as:

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Question 227

Double Materiality – ESG Double materiality means:

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Question 228

Scope 3 Emissions Scope 3 emissions are:

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Question 229

ESG‑Adjusted Discount Rate Base cost of equity = 11%. Governance risk adds 1.5% ESG premium. New cost of equity?

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Question 230

Annual carbon cost = 20 in perpetuity, discount rate = 8%. PV?

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Question 231

APV is most appropriate when:

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Question 232

ERP = 5%, local ERP = 8%. Markets are partially integrated. A reasonable ERP is:

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Question 233

Levered Value via APV Unlevered firm value = 1,000, PV of tax shields = 150, PV of expected distress costs = 50. Levered value?

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Question 234

WACC when:

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Question 235

Sales‑to‑Capital and Growth Sales‑to‑capital = 2.5, reinvestment = 80. Implied revenue growth?

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Question 236

EVA vs NPV Which is most accurate?

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Question 237

A mature firm with stable earnings cuts its dividend by 40% with no clear investment plan. Under signaling theory, this most likely indicates:

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Question 238

Governance & Credit Spread A firm’s governance score improves, reducing its credit spread from 350 bps to 280 bps. Risk‑free rate = 3%. New cost of debt?

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Question 239

Bottom‑Up Beta Construction A firm operates in 3 industries with the following unlevered betas and revenue weights: - Industry A: βu = 1.4 (40%) - Industry B: βu = 0.9 (35%) - Industry C: βu = 0.6 (25%) What is the bottom‑up unlevered beta?

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Question 240

Country Risk Premium via Default Spread Country default spread = 2.5% Equity volatility / bond volatility = 1.3 CRP?

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Free CFA Corporate Issuers Practice Questions & Answers

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