Which of the following will likely provide the most expensive access to funds? A. A credit card company B. An investment company C. A life insurance company D. A finance company E. A payday loan company | Homework.Study.com (2024)

FAQs

Which of the following will likely provide the most expensive access to funds? A. A credit card company B. An investment company C. A life insurance company D. A finance company E. A payday loan company | Homework.Study.com? ›

Answer and Explanation:

Equity capital tends to be among the most expensive forms of capital as investors may expect a share in profit. There are no tax benefits like the ones offered by debt financing.

1. Payday loans. Payday loans are popular among individuals with poor credit because they give you cash quickly and they don't usually require a credit check. The problem is that the interest rates are astronomically high -- in some cases, more than 500%.

Higher interest rates and fees: Banks tend to charge higher interest rates and more fees compared to their credit union and online lender counterparts.

The top 10 most valuable assets in the world by market capitalization are 1. Gold ($14.5 trillion) 2. Microsoft ($3 trillion) 3. Apple ($2.7 trillion) 4.

Cost of equity is a return, a firm needs to pay to its equity shareholders to compensate the risk they undertake, by investing the amount in the firm. It is based on the expectation of the investors, hence this is the highest cost of capital.

Credit cards are a notoriously expensive way to borrow money. If you don't pay off your balance every month, the high interest rate means borrowing that money gets expensive, fast.

Loan Fees

Check for additional fees and charges that can increase the amount you pay — the more fees, the higher the cost of borrowing. Common fees can include: Origination fees - the amount charged for processing the loan application and underwriting services.

On the other hand, a high-cost mortgage has the following three major criteria in its definition: The APR exceeds the APOR by more than 6.5 percent. The total lender/broker points and fees exceed 5 percent of the total loan amount.

The largest purchase ever made on a American Express Business Centurion Card was reportedly a $170 million painting, bought by Chinese billionaire Liu Yiqian Liu.

What card do billionaires use? ›

One of the world's most prestigious credit cards is the Centurion® Card from American Express*. Though there may be other cards with more elaborate benefits, those cards are kept well under wraps.

For longer-term debt the secured line of credit is clearly the least expensive form of credit.

Among their drawbacks, credit cards typically have higher interest rates than personal loans. And some have monthly or annual fees. Most credit cards are unsecured, but borrowers with poor or no credit history may use secured cards, which require a deposit that's used as collateral.

Interest rates and bank profitability are connected, with banks benefiting from higher interest rates. When interest rates are higher, banks make more money by taking advantage of the greater spread between the interest they pay to their customers and the profits they earn by investing.

In general, a secured loan, like a mortgage, will have a lower interest rate than an unsecured loan, like a standard personal loan, because it is less risky for the lender. This is due to the collateral the borrower puts up to get the loan.

Retained earning is the cheapest source of finance.

High Cost Funds (HCF) help offset the financial impact on Local Educational Agencies (LEAs) that provide educational services to high need children with disabilities.

Debt and equity are the two major sources of financing. Government grants to finance certain aspects of a business may be an option. Also, incentives may be available to locate in certain communities or encourage activities in particular industries.