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:

Levels of Achievement

Refers to the varying stages or degrees of success and proficiency individuals attain in specific areas or skills.

Mastery Orientation

An approach to learning and achievement that focuses on gaining new skills, improving competence, and understanding material, rather than a focus on outward success.

Fixed Mindsets

The belief that one's abilities, intelligence, and talents are static traits which cannot be significantly developed.

Cross-race Friendships

Relationships between individuals of different racial backgrounds, which can enhance cultural understanding and reduce biases.