Which of the Following Is Least Likely to Be Correct

question 118

Multiple Choice

Which of the following is least likely to be correct for a firm that repeatedly stretches its payables?

• A)The firm may receive more favourable status from suppliers due to its volume of purchases
• B)The firm may reduce its explicit short-term interest expense
• C)The cost of forgone discounts may exceed the cost of bank credit
• D)The firm may be labeled as a credit risk

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Definitions:

Secondary Market

A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves.

TSX

Toronto Stock Exchange, a major stock exchange in Canada where various publicly held companies are listed and traded.

Corporate Bonds

Debt securities issued by corporations to finance their operations, projects, or expansions, which typically pay fixed interest rates to investors.

Primary Market

The market where new securities are issued and sold for the first time, directly from the issuer to investors.