The Risk to the Firm of Borrowing Using Short-Term Credit

question 28

True/False

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.

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Definitions:

Resistant Children

Children who show opposition or struggle to adapt to changes or new environments, often as a behavioral response.

Emotional Development

The process by which individuals become aware of, understand, and express their emotions, as well as respond to the emotions of others.

Hearts Beat

The rhythmic contraction and relaxation of the heart muscle, which pumps blood throughout the body, essential for maintaining life by delivering oxygen and nutrients to tissues.

Mirror Technique

A therapeutic or self-improvement method where individuals observe themselves in a mirror to foster self-awareness or improve certain skills.