Answered step by step
Verified Expert Solution
Question
1 Approved Answer
When choosing a financing policy for current assets, which risks might a firm face if they use short-term debt as opposed to long-term debt? O
When choosing a financing policy for current assets, which risks might a firm face if they use short-term debt as opposed to long-term debt? O Top executives have more discretion over short-term debt, leading to higher likelihood of misusing funds. Short-term debt has larger fluctuations in interest expense, which can potentially reduce profits. Short-term debt is usually more expensive to the firm than long-term debt. Investors prefer long-term debt, making short-term debt less liquid
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started