One of the Key Inputs to the Final Credit Decision

question 8

True/False

One of the key inputs to the final credit decision is the credit analyst's subjective judgement of a firm's creditworthiness since it can provide a better feel of a firm's operation than any quantitative figures.

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Definitions:

Tax-Deductibility

The feature of certain expenses that can be subtracted from gross income to reduce taxable income and lower the tax bill.

Interest Expense

The cost incurred by an entity for borrowed funds; this can include payments on loans, bonds, or lines of credit.

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Book Value

The net value of a company's assets minus its liabilities, often used to assess a company's financial health.