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The risk to the firm of borrowing using short-term credit is usually greater than if it used long-term debt. Added risk stems from (1) the
The risk to the firm of borrowing using short-term credit is usually greater than if it used long-term debt. Added risk stems from (1) the greater variability of interest costs on short-term than long-term debt and (2) the fact that even if its long-term prospects are good, the firm's lenders may not be willing to renew short-term loans if the firm is temporarily unable to repay those loans. a) ture b) false
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