QUESTION

13. Which of the following statements is CORRECT? A) If a company follows a policy of "matching maturities," this mean

Category: Business
Subject: Finance
Due Date: 01/27/2016
Question Asked: 2016-01-27 18:21:53

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13. Which of the following statements is CORRECT?

A) If a company follows a policy of "matching maturities," this means that it matches its use

of common stock with its use of long-term debt as opposed to short-term debt.

B) If a company follows a policy of "matching maturities," this means that it matches its use

of short-term debt with its use of long-term debt.

C) Net working capital is defined as current assets minus the sum of payables and accruals,

and any increase in the current ratio automatically indicates that net working capital has

increased.

D) Although short-term interest rates have historically averaged less than long-term rates,

the heavy use of short-term debt is considered to be an aggressive strategy because of the

inherent risks associated with using short-term financing.

E) Net working capital is defined as current assets minus the sum of payables and accruals,

and any decrease in the current ratio automatically indicates that net working capital has

decreased.

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13. Which of the following statements is CORRECT? A) If a company follows a policy of "matching maturities," this mean

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...ugh short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associat...

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