Which of the Following Statements Is FALSE

question 51

Multiple Choice

Which of the following statements is FALSE?

• A) By relying on short-term debt, the firm exposes itself to funding risk, which is the risk of incurring financial distress costs if it cannot 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.

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Definitions:

Family Roles

The functions and responsibilities assigned to each family member, often influenced by cultural norms and individual family dynamics.

Moratorium

A period of delay or suspension of an activity or obligation, often used in contexts of developmental psychology to describe a stage of identity exploration.

Identity Development

The process through which individuals understand and realize their own identities, including personal, social, and cultural aspects.

James Marcia

A psychologist notable for his work on adolescent development, specifically his theory on identity achievement and identity statuses.