Price for debt is called_________?
Correct answer: D. Interest rate
- A. Debt rate
- B. Investment return
- C. Discount rate
- D. Interest rate
Explanation
The price paid for using borrowed funds is interest, normally expressed as an interest rate. A discount rate is used in valuation and certain financial transactions, but is not the basic price of debt.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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