Along with decisions about optimal debt structure, firms need to decide on the kind of maturities the debt in their capital structure should have. There are several factors that affect the choice of maturity structure.

Based on your understanding of the factors associated with the choice of maturity structure, complete the following sentences:

$$ Suppose a company took a $2-$year debt that could be rolled for a $10-$year asset maturity. It would have to pay a higher rate if interest rates increased $.$

$$ A firm is likely to use short$-$term debt when managers expecthigher earnings that will increase the value of the firm's stock.

$$ If the amount of financing required is relatively small, the company is likely to get a term loan or a private placement $.$

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