Which of the following best explains why a firm that needs to borrow money would borrow at long-term rates when short-terms rates are lower than long-term rates? The use of short-term financing over long-term financing for a long-term project will increase the risk of the firm The firm's interest payments will be the same whether it uses short-term or long-term financing, so it is essentially indifferent to which type of financing it uses A firm will only borrow at short-term rates when the yield curve is downward-sloping Credit ratings affect the yields on bonds. Based on the scenario described in the following table, determine whether yields will increase or decrease and whether it will be more expensive or less expensive, as compared to other players in the market, for a company to borrow money from the bond market Impact on Cost of Borrowing Money from Bond Scenario Yield Markets A car manufacturing company loses 40% of its market share and has a declining investment in new product development. A start-up company is struggling with finances for its projects. A company's interest coverage ratio improves. A company's cred it rating was upgraded from AA to AAA