Sales Finance Companies Commonly Purchase the Retail Installment Contracts of Businesses

question 53

True/False

Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles,furniture,and appliances.

---

Definitions:

Contributed Capital

The total value of the cash and other assets received by a company from its shareholders in exchange for stock, also known as paid-in capital.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often paying fixed dividends.

Callable Preferred Stock

A type of preferred stock that gives the issuer the right to redeem the stock at a predetermined price after a certain date.

Convertible Preferred Stock

A type of preferred stock that gives the holder the option to convert it into a specified number of common stock shares, usually at any time after a predetermined date.