corp — CFA Level I Practice Questions

28 free CFA Level I questions on corp: 8 easy, 14 medium, and 6 hard, every one exam-realistic and fully explained once you sign in. This is the fastest way to turn corp from a weakness into a scoring area — drill it in 10-question reps with immediate feedback.

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1. Which component of the WACC formula is typically the most difficult to estimate with precision?
2. Oakridge Capital finds that Project X has a much larger initial outlay than Project Y. Even if Project Y has a
3. Helion Rail is comparing Project A (NPV = $10,000) and Project B (NPV = $8,000). The projects are mutually exc
4. A price-weighted index contains three stocks priced at 20, 50, and 90. If the 90 stock undergoes a 3-for-1 sto
5. Helion Rail uses the crossover rate to analyze two projects. If the projects have the same initial outlay, the
6. Which of the following would cause a project's NPV profile to shift vertically upward (higher NPV at all rates
7. Oakridge Capital is considering a project with an initial outlay of $500, providing cash flows of $200 for 3 y
8. Vesper Foods has r_e = 15.4%, r_d = 7.0%, D/E = 0.80, and t = 30%. The unlevered cost of equity (r_0) is close
9. A project's NPV profile intercepts the vertical (y) axis at the:
10. In a world with corporate taxes but no financial distress costs, if Helion Rail maintains a positive spread be
11. Vesper Foods finds that at their current WACC, two mutually exclusive projects have the same NPV. This implies
12. Helion Rail has a target capital structure of 30% debt and 70% equity. The pre-tax cost of debt is 6%, the equ
13. Oakridge Capital is evaluating two mutually exclusive projects. Project A has an IRR of 15% and a smaller scal
14. Helion Rail has a capital structure of 60% equity and 40% debt. If the cost of equity is 12%, the pre-tax cost
15. An analyst at Northline Timber is comparing NPV and Internal Rate of Return (IRR) for an independent project w
16. Which market provides 'price discovery' and liquidity for existing securities without providing new capital to
17. Which of the following sequences best represents the company's preferred order of funding?
18. If the project has 'conventional cash flows', how many times will the NPV change signs as the discount rate in
19. A 'Proxy Solicitor' is a firm hired by Northline Timber to:
20. Juniper Health's board is composed of 12 members, 10 of whom have no professional or personal ties to the mana
21. If there are 3 board seats open and a shareholder owns 1,000 shares, how many votes can they cast for a single
22. Juniper Health has a debt-to-equity (D/E) ratio of 0.5. If the after-tax cost of debt is 4% and the cost of eq
23. Sable Payments has $200 million in market value of debt and $300 million in market value of equity. If the pre
24. The 'Agency Cost of Equity' includes all of the following EXCEPT:
25. Sable Payments is a startup with highly volatile cash flows and few tangible assets. Compared to a mature util
26. According to the 'Pecking Order Theory', if Northline Timber needs to fund a new project, it will prefer to us
27. What is the component cost of preferred stock (r_p) for Juniper Health?
28. If the project is funded by 100% debt at an interest rate of 6%, but the firm's WACC is 10%, which rate should