All of the Following Are Likely to Increase the Cost

question 136

Multiple Choice

All of the following are likely to increase the cost of a company's short-term financing except:

• A) an increase in the bank's prime lending rate.
• B) an increase in the compensating balance required.
• C) taking a loan on a discount basis.
• D) an increase in the company's debt rating by Moody's or Standard and Poors.

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Definitions:

Negligence

Failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability for the resulting harm.

Directors

Individuals elected by shareholders to oversee the management of a corporation and make major decisions.

Board Meetings

Formal gatherings of the board of directors of an organization or company to discuss and decide on corporate matters.

Litigation

The process of taking legal action in court to enforce or defend rights.