All of the Following Are Potential Disadvantages of Short-Term Debt

question 66

Multiple Choice

All of the following are potential disadvantages of short-term debt EXCEPT

• A) short-term debt must be paid back more quickly than long-term debt.
• B) uncertainty of interest costs because short-term debt must be replaced often.
• C) a greater risk of illiquidity than long-term debt.
• D) short-term debt generally has a higher interest cost than long-term debt.

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Definitions:

Reciprocate

To respond to a gesture, action, or emotion with a similar one, often related to mutual exchange.

Transformational Leadership

A leadership style that inspires positive changes within individuals and organizations by focusing on innovation, motivation, and looking beyond self-interest for the greater good.

Transactional Leadership

A leadership style focused on the exchange between the leader and followers, where compliance results in rewards and noncompliance results in punishment.

Laissez-Faire

A leadership style characterized by an absence of direct supervision, allowing team members to make decisions and carry out tasks autonomously.