In Applying for a Credit Card,the Potential Creditor Will Look

question 14

Multiple Choice

In applying for a credit card,the potential creditor will look at which of the following as a source of future debt payments if necessary?

• A)Cash outflows
• B)Credit history
• C)Potential inheritances
• D)Balances in savings accounts

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Definitions:

Cost Of Debt

The effective rate that a company pays on its current debt, incorporating interest payments and other related expenses.

Loaned Funds

Money that is borrowed, typically from a financial institution, which requires repayment with interest.

Coupon Rate

The percentage of the face value that is paid as interest on a bond annually.

Dividend Growth Model

A valuation method that estimates the price of a stock based on the assumption that dividends will increase at a constant growth rate.