Question
Which of the following statements is CORRECT? A firm's AFN must come from external sources, i.e. short-term bank loans, long-term bonds, preferred stock, common stock.
Which of the following statements is CORRECT?
A firm's AFN must come from external sources, i.e. short-term bank loans, long-term bonds, preferred stock, common stock.
The fact that long-term debt and common stock are raised infrequently and in large amounts lessens the need for the firm to forecast those accounts on a continual basis
Firms pay a low interest rate on spontaneous liabilities so these funds are its cheapest source of capital. Consequently, the firm should make arrangements with its suppliers to use as much of this credit as possible
If a firm wants to maintain its ratios at their existing levels, then if it has a positive sales growth rate of any amount, it will require some amount of external funding.
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