CFA Domain 5: Corporate Issuers (Quiz 1)

At a shareholders' annual general meeting (AGM), which of the following most likely requires a supermajority vote?

An investor who invests only in the alternative energy subsector is most likely employing which environmental, social, and governance implementation approach?

The manager of an environmental, social, and governance (ESG) fund wants to construct a portfolio with sector weightings approximating those of broad-based indexes. Based only on this information, which of the following ESG investing styles is most appropriate for this portfolio?

VWhich of the following is correct according to the pecking order theory? Managers prefer:

A coal company is purchasing a five-year license to dig a new mine. It will start excavation when the price of coal justifies it. The option is best described as a:

A company plans to retool an automobile factory to produce a new model to replace the existing model. Which of the following is most appropriately considered an opportunity cost?

A company improved its operating cycle this fiscal year. If the company significantly increased its days of inventory on hand (DOH) over the same period, then the company most likely decreased its:

If senior management is compensated with stock options, that would most likely provide an incentive for it to pursue which of the following strategies?

Company A's common stock is trading at its intrinsic value as estimated by the Gordon growth model. This valuation implies that the dividend growth rate used in the model is most likely:

Which of the following is most likely characteristic of a firm in its mature life cycle phase?

Company XYZ has evolved into a company with significant debt, moderate revenue growth, and steady positive cash flow. Its stock price is consistently undervalued by the market. Based on only this information, XYZ's current scenario is most advantageous for which of the following stakeholder groups?

A company has a degree of operating leverage of 2.6 and a degree of financial leverage of 1.5. If units sold increases by 5%, the percentage change in net earnings will be closest to:

A company is considering the introduction of a new product and expects that, as a result, sales of its existing products will decrease. This is best described as a(n):

A company has a constant growth rate. All else being equal, if that growth rate increases, according to the dividend discount model (DDM), the company's cost of equity capital most likely:

Two companies have identical sales figures (price and volume) and identical fixed interest costs. If the companies have different fixed operating costs, they will most likely have different:

The founder of Company P, who owns 51% of the company, chooses to buy materials from Firm S, which is owned by a family relative. Firm S charges 25% above current market price for its products, which are of ordinary quality. In this scenario, conflicts of interest are most likely to arise between Company P's:

Which of the following factors is most likely considered a drag rather than a pull on a company's liquidity position?

A company's operating cycle lengthens as a result of extending its credit terms from 30 to 90 days. This is least likely to cause concern for the company's:

A company has positive operating profits and constant fixed costs and contribution margins. As the number of units produced and sold increases, the company's degree of operating leverage (DOL) most likely:

A company operates at its target capital structure. If its actual capital structure then diverges from the target, which of the following factors is least likely the cause? All else being equal, the company: