Which of the Following Statements Is False

question 18

Multiple Choice

Which of the following statements is false?

• A) On the other hand, by relying on short-term debt the firm exposes itself to funding risk, which is the risk of incurring financial distress costs should the firm not be able to refinance its debt in a timely manner or at a reasonable rate.
• B) An ultra-conservative policy would involve financing even some of the plant, property, and equipment with short-term sources of funds.
• C) With a conservative financing policy, the firm would use short-term debt very sparingly to meet its peak seasonal needs.
• D) Short-term debt can have lower agency and lemons costs than long-term debt, and an aggressive financing policy can benefit shareholders.

---

Definitions:

Computer Program

A set of instructions written in a programming language that is executed by a computer to perform a specific task or solve problems.

Messages

Units of communication that convey information, intentions, or requests between individuals or groups.

Eavesdropping

The act of secretly listening to the private conversations of others without their consent.

Spelling

The process or activity of writing or naming the letters of a word in correct sequence.