Personal Credit Cards Have Proven to Be a Source of Financing

question 18

Multiple Choice

Personal credit cards have proven to be a source of financing for start-up firms for all of the following reasons except?

• A) credit card debt is not based on the firm's ability to repay, but rather the individual card holder's ability to repay
• B) teaser rates afford initial low cost borrowing
• C) balance transfer at below-prime rates
• D) credit card debt can create problems if the firm doesn't generate cash flows to cover credit card payments once low introductory rates expire

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Definitions:

Markets

Platforms or systems where buyers and sellers interact to trade goods, services, securities, or other assets.

Call Option Valuation

The process of determining the value of a call option, which gives the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Slope Approaches

Techniques used to determine the direction and rate of change in data, often applied in statistical and economic models.

Stock's Price

The current market value at which a share of a particular stock can be bought or sold.