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Author Question: Which of the following is an advantage of utilizing short-term debt to finance the acquisition of ... (Read 86 times)

sammy

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on: Jul 10, 2018
Which of the following is an advantage of utilizing short-term debt to finance the acquisition of
  short-term assets?
 
  A) It exposes the firm to less risk than if the firm were to use long-term debt.
  B) Interest rates on short-term debt are usually lower than interest-rates on long-term debt.
  C) It improves the firm's debt ratio.
  D) It increases the firm's sustainable growth rate.

Question 2

Operating leverage means financing a portion of a firm's earnings per share with debt.
 
  Indicate whether the statement is true or false
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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Ashley I

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Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

FALSE


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