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.

---

Definitions:

Pretest Impact

The influence that prior testing might have on the participants' subsequent performance on a posttest, affecting the interpretation of an intervention's effect.

Posttest Scores

The scores obtained from tests administered after an experimental treatment or intervention to evaluate its effects.

Independent Groups Design

A research design in which different groups of participants are exposed to different conditions or levels of the independent variable.

Variable Manipulation

The process of intentionally changing variables to test their effects in an experiment.