The Most Common Source of Debt Financing Is

question 77

Multiple Choice

The most common source of debt financing is

• A)trade credit.
• B)factoring.
• C)commercial banks.
• D)finance companies.

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Definitions:

Treasury Bill

A short-term government security issued at a discount from par value and paying no interest, maturing in a year or less.

Simple Interest

Interest calculated only on the principal amount, without compounding on accumulated interest.

Selling Price

The amount of money for which a product or service is sold to customers.

Revolving Line of Credit

A credit facility extended by a financial institution to a customer that allows the customer to borrow up to a certain limit, pay down the balance, and then borrow again.