Companies Often Look at Short-Term Debt Financing Because It Is

question 35

Multiple Choice

Companies often look at short-term debt financing because it is usually easier to obtain than long-term debt financing for three reasons. Which of the following is NOT one of the three reasons?

• A) For the lender, the shorter repayment period means less risk of default.
• B) Short-term loans look better on the balance sheet than long-term loans.
• C) The dollar amounts are usually lower than those of long-term loans.
• D) A close working relationship normally exists between the short-term borrower and the lender.

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Definitions:

Richest 10%

The segment of a population that holds the greatest wealth, typically measured as the top 10% in terms of income or assets.

Income Inequality

The unequal distribution of income among a population, often measured by various statistical tools and indicators, highlighting disparities in wealth among individuals or groups.

Primary Problem

The fundamental or main issue that needs to be addressed or solved in a particular context.