What Is One of the Advantages of Short-Term Debt Financing

question 75

Multiple Choice

What is one of the advantages of short-term debt financing.

• A)Firms can obtain short-term credit more quickly than long-term credit.
• B)Firms can obtain long-term more quickly than short-term credit.
• C)Firms can obtain short-term credit to pay preferred dividends in the short-run.
• D)Firms can obtain short-term credit to from accounts receivable in the short-run at cheaper rates.

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Definitions:

Market Share

The percentage of an industry's sales that a particular company controls.

Herfindahl-Hirschman Index

A measure of market concentration used to determine the level of competition within an industry, calculated by summing the squares of the market shares of all firms in the market.

Marginal Revenue

The additional income that is gained from selling one more unit of a good or service, crucial for businesses when deciding how much to produce.

Total Cost

The complete cost of production that includes both fixed and variable costs incurred in creating goods or services.