The Use of Debt Is Not Typically Needed for Firms

question 82

True/False

The use of debt is not typically needed for firms in industries that offer some degree of stability, are in a positive stage of growth, and are operating in favorable economic conditions.

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Definitions:

Marginal Extraction Cost

The additional cost associated with extracting one more unit of a resource.

Treasury Bill

A short-term government security issued at a discount from the par value and pays no interest, maturing in a year or less.

Treasury Bond

Long-term government debt securities with a fixed interest rate and maturity of more than 10 years.

Short-Term

A period of time that is relatively brief, usually focusing on immediate or near-future events or goals, often contrasted with long-term perspectives.