Higher Financing Cost and Lower Risk of Not Being Able

question 47

Multiple Choice

Higher financing cost and lower risk of not being able to borrow when short-term funds are needed are characteristics of:

• A) aggressive financing
• B) conservative financing
• C) maturity matching
• D) term borrowing

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Definitions:

GAAP

Generally Accepted Accounting Principles, which are standards and conventions for financial reporting in the United States.

Compensation Costs

The expenses incurred by a company to pay employees, including salaries, benefits, bonuses, and social security contributions.

Grant Date

The date on which an employee receives a stock option or grant as part of their compensation package.

Stock-Based Compensation

A method of paying employees or service providers using shares of the company's stock, reflecting a form of non-cash compensation.