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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 241

Global CAPM Risk‑free = 3% Global beta = 1.1 Global ERP = 5% Cost of equity?

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Question 242

ERP = 8% Global ERP = 5% Integration weight = 40% global, 60% local Hybrid ERP?

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Question 243

WACC with Changing Capital Structure Equity = 55%, Debt = 45% Cost of equity = 13% Cost of debt = 7% Tax = 25% WACC?

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Question 244

APV – Changing Leverage Unlevered value = 900 PV of tax shields = 180 PV of distress costs = –60 APV?

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Question 245

Cost of Debt from Yield Spread Risk‑free = 3% Credit spread = 280 bps Cost of debt?

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Question 246

After‑Tax Cost of Debt Pre‑tax cost = 7.5% Tax = 28%

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Question 247

Cost of Equity – Build‑Up with Country Risk Risk‑free = 4% ERP = 5% Size premium = 2% CRP = 3%

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Question 248

WACC = 10% Expected FX depreciation = 2% Foreign‑currency WACC?

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Question 249

APV – Tax Shield Discount Rate If debt is risky and tax shields share the same risk as debt, discount tax shields at:

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Question 250

FCF next year = 200 WACC = 9% g = 3%

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Question 251

EVA Calculation NOPAT = 320 Capital = 2,500 WACC = 9%

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Question 252

Sales‑to‑Capital Revenue = 3,000 Capital = 1,200

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Question 253

Working Capital Increase WC = 15% of revenue Revenue grows from 2,000 → 2,400

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Question 254

Net Investment Dep = 100 Capex = 180

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Question 255

Equity Value per Share EV = 6,000 Net debt = 1,800 Shares = 200

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Question 256

EVA vs NPV Which is true?

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Question 257

Leverage Increase EBITDA = 600 Leverage rises from 3× → 4.5× New debt?

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Question 258

Interest Coverage EBIT = 480 Interest = 80

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Question 259

Working Capital Deficit Target WC = –50. Effect on EV?

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Question 260

Interest Burden EBIT = 500 Interest = 100 Interest burden ratio?

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Question 261

Debt Capacity Target leverage = 3× EBITDA = 700 Current debt = 1,500

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Question 262

Credit Spread Impact on WACC A firm’s credit spread widens from 250 bps to 320 bps. Risk‑free = 3%. Debt weight = 40%. Tax rate = 25%. What is the increase in WACC due solely to the spread change?

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Question 263

ESG Risk Premium Base cost of equity = 10% Environmental risk premium = 1.2% Governance risk premium = 0.8% Adjusted cost of equity?

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Question 264

A firm with volatile earnings unexpectedly raises its dividend by 25%. Under signaling theory, this most likely indicates:

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Question 265

Carbon Tax Impact on Operating Margin Revenue = 3,000 Carbon tax = 45 per year Operating margin = 12% New operating margin?

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Question 266

ESG Discount Rate Reduction Cost of equity drops from 12% → 11% due to governance improvements. FCF = 250 Growth = 2% Increase in firm value?

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Question 267

D/E ratio and rebalances continuously. Debt is risky. Under the Miles–Ezzell framework, the appropriate discount rate for the tax shield is closest to:

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Question 268

Unlevered firm value = 1,000. Debt = 400. Tax rate = 25%. Under MM with corporate taxes (no distress), what is the levered firm value?

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Question 269

MM with Corporate & Personal Taxes Corporate tax = 30% Personal tax on equity = 20% Personal tax on interest = 40% The effective tax advantage of debt is:

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Question 270

Debt is risky, and the firm’s tax shield is proportional to interest. If the probability of default is significant, the tax shield should be discounted at:

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Free CFA Corporate Issuers Practice Questions & Answers

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