Q3: In your own words, what is meant by Relaxed Strategy?

CHAPTER 19 Short-Term Financial Planning CORPORATE FINANCE BREALEY MYERS MARGUS McGraw-HillIrwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Planning Strategies (a) Three approaches: Long-term financing Asset requirements Dollars Excess capital = investment in cash and marketable securities a) Relaxed Strategy -permanent cash surplus Time (b) b Fim is a short-term borrower in this region Asset requirements Long-term financing Dollars Firm holds marketable securities Time b) Middle-of-the-road Policy (c) Short-term borrowing Asset requirements c) Restrictive Policy -permanent need for short-term borrowing -Long-term financing Dollars Time