A conservatively financed firm would: A. use long-term financing for all fixed assets and short- term financing for all other assets. B. finance a portion of permanent assets and short-term assets with short-term debt. C. use equity to finance fixed assets, long-term debt to finance permanent assets, and short-term debt to finance fluctuating current assets. D. use long-term financing for permanent current assets, fixed assets, and a portion of the short-term fluctuating assets, and use short-term financing for all other short- term assets.
A conservatively financed firm would: A. use long-term financing for all fixed assets and short- term financing for all other assets. B. finance a portion of permanent assets and short-term assets with short-term debt. C. use equity to finance fixed assets, long-term debt to finance permanent assets, and short-term debt to finance fluctuating current assets. D. use long-term financing for permanent current assets, fixed assets, and a portion of the short-term fluctuating assets, and use short-term financing for all other short- term assets.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A conservatively financed firm would:
A. use long-term financing for all fixed assets and short-
term financing for all other assets.
B. finance a portion of permanent assets and short-term
assets with short-term debt.
C. use equity to finance fixed assets, long-term debt to
finance permanent assets, and short-term debt to finance
fluctuating current assets.
D. use long-term financing for permanent current assets,
fixed assets, and a portion of the short-term fluctuating
assets, and use short-term financing for all other short-
term assets.
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