Which ONE of the Following Statements About Aggressive Funding Strategy

question 56

Multiple Choice

Which ONE of the following statements about aggressive funding strategy is true?

• A) All working capital and a portion of fixed assets are funded with short-term debt.
• B) This strategy lowers the cost under some interest rate scenarios.
• C) It forces the company to continually refinance the funding of the long-term assets in a changing interest rate environment.
• D) All of the above.

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Definitions:

Earnings Per Share

A financial ratio that measures the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability on a per-share basis.

Dividends Per Share

The amount of declared dividends for every share of common stock, indicating the dividend payout to shareholders.

Return On

generally starts a financial metric indicating the efficiency of an investment or comparing the efficiency of several investments, measuring profit in relation to capital invested.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, often referred to as shareholders' equity.