A Firm Will Borrow Long-Term

question 56

Multiple Choice

A firm will borrow long-term

• A) if the extra interest cost of borrowing long-term is less than the expected cost of rising interest rates before it retires its debt.
• B) if the extra interest cost of borrowing short-term due to rising interest rates does not exceed the expected premium that is paid for borrowing long-term.
• C) if short-term interest rates are expected to decline during the term of the debt.
• D) if long-term interest rates are expected to decline during the term of the debt.

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Definitions:

Actor-Network Theories

A theoretical and methodological approach in social science that emphasizes the agency of both human and non-human actors in networks of relationships.

Human Actors

Individuals who take action or play roles within various social, economic, or political contexts.

Actor-Network

A theoretical and methodological approach within the social sciences that treats objects as part of social networks, emphasizing the materiality of action.

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Advanced mobile phones that combine computing capability, including internet access and the ability to run software applications, with traditional cellular phone functions.