Which of the Following Is a Reason Why Conflicts Are

question 6

Multiple Choice

Which of the following is a reason why conflicts are lower among the capital providers of firms financed with short-term debt?

• A)Short-term debt is not affected by credit ratings of other outstanding long-term debt.
• B)Short-term debt cannot be repaid by issuing other long-term debt.
• C)Firm value is not affected by short-term debt and only takes into account long-term debt and equity.
• D)Short-term debt is less sensitive to a firm's investment decisions.

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