Which of the Following Are the '5 Cs of Credit

question 83

Multiple Choice

Which of the following are the '5 Cs of Credit'?

• A)Character, Capacity, Compensation, Collateral, Conditions
• B)Character, Cash, Credit, Collateral, Collectability
• C)Cash, Capacity, Capital, Compensation, Collectability
• D)Character, Capacity, Capital, Collateral, Conditions

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Definitions:

Leveraged Firm

A company that uses debt along with equity to finance its assets, often resulting in higher potential returns but also higher risk.

ROE

Return on Equity, a financial ratio indicating the profitability of a corporation in relation to stockholders’ equity, showing how well the company uses investments to generate earnings growth.

EPS

Earnings Per Share, a company's profit divided by the number of outstanding shares of its common stock, indicating the company's profitability.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profit that includes all incomes and expenses except interest and income tax expenses.