A Conservatively Financed Firm Would

question 53

Multiple Choice

A conservatively financed firm would:

• A) use long-term financing for all capital assets and short-term financing for all other assets.
• B) finance a portion of permanent assets and short-term assets with short-term debt.
• C) use equity to finance capital assets,long-term debt to finance permanent assets,and short-term debt to finance fluctuating current assets.
• D) use long-term financing for permanent assets and capital assets and a portion of the short-term fluctuating assets and use short-term financing for all other short-term assets.

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Monetary Terms

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