Which of the following is the least permanent source of capital for a firm?
A)A 10% coupon bond purchased 3 years ago
B)Preferred shares
C)10% coupon bonds issued 10 years ago
D)Accounts payable

Question

Quizplus · Accepted Answer

Accounts payable is a short-term source of financing that must be repaid within a short period of time, usually 30 to 90 days. Therefore, it is the least permanent source of capital for a firm. The other options, such as a bond purchased years ago or preferred shares, represent more long-term sources of financing.

Which of the Following Is the Least Permanent Source of Capital