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:

Nucleic Acids

Large biomolecules essential to all known forms of life, including DNA and RNA, which store and transmit genetic information.

Guanine

One of the four main nucleobases found in the nucleic acids DNA and RNA.

Representation

Representation can refer to the act of speaking or acting on someone's behalf or depicting or describing something.

Cytosine

One of the four main bases found in DNA and RNA, which pairs with guanine in the genetic code.