Medium Principles of Finance Practice Questions
199 free medium-difficulty Principles of Finance questions, drawn live from KomFi's calibrated bank. The exam backbone: the difficulty band where most scoring happens.
- Which account provides a higher effective return?
- If the pre-tax cost of debt is 6% and the marginal tax rate is 25%, what is the firm's WACC?
- What is the current market price of the bond?
- If the required return is 10%, what is the value of the stock using a two-stage DDM?
- A firm has FCFF of $100M, interest expense of $20M, a tax rate of 25%, and net new borrowing of $10M. Calculat
- What is the Profitability Index (PI) and what does it indicate for capital rationing?
- What is the value of a 1-year European call option with a strike price of $100 using the one-period binomial m
- The scholarship is intended to grow by 3% annually to keep pace with inflation. If the foundation's required r
- A 5-year zero-coupon bond with a face value of 1,000 is curr… — What is the yield to maturity (YTM) of this bo
- If the bond is currently trading at $920, what is its current yield?
- An investor buys a 1,000 par bond for 1,050. The bond pays a semi-annual coupon of 30. If the bond is sold 6 m
- What is the Payback Period of the project?
- What is the expected return of the total portfolio?
- If revenue increases by 10%, what is the resulting percentage increase in operating income (EBIT)?
- A $1,000 face value bond with a 5% annual coupon has 5 years to maturity. If the current market yield is 6%, w
- Calculate the Interest Coverage Ratio for a firm with Revenue of 1,000,000, COGS of 600,000, Operating Expense
- If the private company intends to operate with a D/E ratio of 1.00 and faces the same tax rate, what is its re
- Assuming no synergies and no deal-related accounting adjustments, what will be the immediate impact on the acq
- If the cost of capital is 10%, what is the project's Profitability Index (PI)?
- If the marginal tax rate is 30%, what is the Weighted Average Cost of Capital (WACC)?
- What is the approximate predicted change in the bond's price?
- What is the insurer's Combined Ratio, and what does it indicate about their underwriting profitability?
- If the correlation between A and B is 0, what is the expected return of the portfolio?
- Under the no-arbitrage principle, what is the implied 1-year forward rate starting one year from now (f(1, 2))
- If the cost of capital is 10%, how do the Internal Rate of Return (IRR) and the Modified Internal Rate of Retu
- Under the new lease accounting standard (ASC 842), how does the classification of a lease as an 'operating lea
- If market yields are expected to rise by 50 basis points, what is the approximate percentage change in the bon
- Acquirer A (P/E = 20) is buying Target T (P/E = 15) in an al… — Assuming no synergies and no deal costs, how w
- If the expected recovery rate (R) on the debt is 40%, what is the market-implied annual probability of default
- With a 25% tax rate, what is the WACC?
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