Although Interest Rates Are Generally Higher on Long-Term Debt,using More

question 49

True/False

Although interest rates are generally higher on long-term debt,using more long-term debt rather than short-term debt can reduce the risk of illiquidity and decrease uncertainty related to interest rate changes.

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Definitions:

Assets

Economic resources owned by a business or individual that are expected to provide future benefits.

Par Value

The face value of a bond or stock as stated by the issuer, which bears importance in the legal capital of a company.

Land

A physical, immovable property asset, representing the earth's surface not including bodies of water or resources below the surface.

Cash Dividend

A distribution of profits by a corporation to its shareholders in the form of cash.