D365 Financial Management II, catalog number FINC 3102, is the three-CU second half of the undergraduate financial management pair, covering capital budgeting, long-term funding strategies and corporate investment planning. Where the first course managed the cash the firm already has, this one decides what the firm should build and how it should pay for that. Two decisions, and the second is the one students underprepare for.
The financing decision deserves half your attention
Most students arrive at FINC 3102 expecting a course about net present value, and there is plenty of that. What surprises them is how much of the assessed material sits on the other side of the balance sheet: where long-term money comes from, what each source costs, what it demands in return, and how the mix changes the firm's risk.
Debt is cheap because interest is deductible and lenders rank ahead of owners, and it is dangerous because the payments are contractual regardless of how trade is going. Equity is expensive because shareholders bear residual risk and demand compensation for it, and it is safe because nothing is owed if nothing is earned. Retained earnings look free and are not: money kept inside the firm carries the return shareholders could have earned elsewhere.
Out of that comes the capital structure question, and it is genuinely a question rather than a formula. More debt lowers the average cost of funds until the added risk starts raising the cost of everything, and where that turning point sits depends on the stability of the firm's cash flows. An assessed answer names the direction, gives a reason grounded in this firm's earnings volatility, and declines to pretend there is an exact optimum.
Weighting aspects when exhibits carry the load
Each rubric aspect in your Course of Study is scored on its own and needs a 2. Long-horizon finance tasks generate exhibits, and the planning question is how much prose belongs beside each one.
Worked example, exhibit-weighted. Suppose your rubric lists five scored aspects and the directions ask for roughly 2,200 words, with schedules permitted as attachments. Count the exhibits each aspect implies. Two aspects will produce a cash flow schedule and a cost of capital computation, so they need less prose per point made: 380 words each, or 760. The financing strategy aspect has no natural exhibit and carries an argument, so it needs 560. The remaining two take 440 each, or 880. That totals 2,200 exactly.
The instructive part is that the aspect with no exhibit gets the most words. Wherever a rubric asks you to recommend a funding approach or to justify a capital structure, there is no table that makes the argument for you, and evaluators reading a thin financing section reasonably conclude the student had no argument at all.
Comparing long-term funding sources
Where a task asks how a project or a firm should be funded, a comparison built on consistent columns keeps the analysis honest. Task directions take precedence where they set their own layout.
| Funding source | What it costs the firm | What it demands in return | When it fits |
|---|---|---|---|
| Retained earnings | The return shareholders forgo by leaving money in the business | Nothing contractual, but shareholder patience is finite | Steady internal growth funded from operations |
| Long-term debt | Interest, reduced by its deductibility | Fixed payments, covenants and priority in liquidation | Stable, predictable cash flows that can service fixed obligations |
| Lease financing | Payments over the asset's use, often at a higher implied rate | Use of the asset with the obligation now recognized on the books | Asset-specific needs where preserving other credit capacity matters |
| New equity | The return shareholders require for residual risk | A share of ownership, control and future profits | High-risk growth where fixed payments would be dangerous |
| Hybrid instruments | Between the two, depending on structure | Conditional claims that can convert or accumulate | Situations where neither pure form is acceptable to both sides |
Whatever the mix, the weighted cost of capital is the number that ties the financing side back to the investment side, because it is the rate the projects must beat. Compute it explicitly, show the weights and their basis, and use that same rate in the capital budgeting section. A document that discounts at one rate and computes a cost of capital of another has contradicted itself in front of the evaluator.
Supporting long-horizon claims
Long-horizon analysis is more assumption than data, so disclosure carries the weight that observation carries elsewhere.
- State the forecast horizon and why it fits the asset. A five-year horizon on a twenty-year asset needs a terminal value and an explanation.
- Show the weights in the cost of capital and say whether they are book or market based, since the two can differ substantially.
- Separate the operating forecast from the financing assumption. Mixing them is how students accidentally count the tax shield twice.
- Cite market data with a date and a source, and course material in APA paraphrase, keeping quotation minimal because submissions are similarity-checked.
- Where an input is genuinely unknowable, present a range rather than a false point estimate, and carry the range into the conclusion.
Dividend and distribution policy belongs in this course too, and it is frequently underweighted because it sits between the investment and financing decisions rather than inside either. Money paid out to owners is money not available for projects, so a firm with strong investment opportunities and a generous distribution policy is funding one decision by weakening the other. Where a task supplies a payout history, read it as a financing constraint: the residual after distributions is the internal funding actually available, and a plan that ignores it will call for less external capital than the firm really needs.
Scenario work is the strongest evidence available in this course. A base case, a downside and an upside, each with the decision that follows, demonstrates that you understand the answer depends on the inputs. It is also the most efficient way to fill a risk aspect, because the scenarios are already computed.
What clears the bar on investment and financing work
Each aspect stands alone against the competency standard, and the recurring theme is internal consistency across a document with many numbers in it.
- The discount rate used in the project analysis is the cost of capital computed elsewhere in the document.
- Cash flows are incremental and after tax, with depreciation handled as a tax effect rather than as an outflow.
- Financing recommendations name a mix, not just a preference, and justify it from the firm's cash flow stability.
- At least one alternative scenario is computed and its decision implication stated.
- The recommendation commits to an action and identifies what would reverse it.
WGU marks work Competent or Not Competent, with no letter grade and no ordinary grade point average, and performance assessment work can be revised and resubmitted without penalty. A return is queue time, which matters because a six-month flat-rate term rewards whoever closes the most courses inside it. If a proctored objective assessment forms part of this course, we prepare only: discounting drills, cost of capital practice and a readiness verdict, never a sitting and never a request for credentials.
Five mistakes in long-horizon finance work
- Using book weights when market weights are available. The cost of capital is a forward-looking number and book values are historical.
- Double counting the tax shield. If interest is inside the discount rate, it does not also belong in the cash flows.
- Forgetting the terminal value. Truncating a long-lived project at the forecast horizon understates it, sometimes enormously.
- Recommending a capital structure with no reference to cash flow volatility. The right amount of debt depends on how reliably the firm can service it.
- Treating a single scenario as the answer. One set of assumptions produces one number, and the course is assessing whether you know that.
Support across both decisions
Send the rubric, the directions and any project or firm data. The draft comes back with the cost of capital computed and its weights shown, the project cash flows laid out incrementally and after tax, discounting done at the rate the document itself established, a funding comparison with columns that stay consistent, and scenarios that carry through to the recommendation. The walkthrough concentrates on the internal consistency, because that is where these documents most often break.
D365 follows D364 Financial Management I and sits close to D366 Financial Statement Analysis, which supplies the historical read that any forecast has to start from. Students running the finance sequence in one term usually take them in that order.
Questions students ask about D365
Is D365 the same as FINC 3102?
Is D365 the undergraduate version of the graduate finance course?
How much spreadsheet work is involved?
Capital budgeting and financing in one task?
Send the project data and the rubric. You get a consistent document where the discount rate and the cost of capital are the same number.
Where D365 sits in WGU's programs
The July 2026 catalog places this code in 1 current WGU program. Open a program page for the complete standard path and term positions. The live Degree Plan remains authoritative after transfer credit, substitutions, and mentor planning.
The assessments, one by one
The public catalog does not publish this course's PA/OA identity or task count. WGU Tutors publishes at most one PA manual per course and only from a WGU-controlled public rubric. Until that source exists, PA help begins from the student's real Course of Study and OA support remains preparation only.