Which of the following is true of an aggressive funding strategy of a firm?
A) Under an aggressive funding strategy, a firm funds it seasonal requirements with bonds and long-term loans.
B) Under an aggressive funding strategy, a firm funds its seasonal requirements with short-term debt.
C) Under an aggressive funding strategy, a firm funds both its seasonal and its permanent requirements with long-term debt.
D) Under an aggressive funding strategy, a firm funds it permanent requirements with commercial paper and notes payable.

Question

Quizplus · Accepted Answer

An aggressive funding strategy involves funding seasonal requirements with short-term debt, which includes things like lines of credit and commercial paper. Long-term debt is used to fund permanent requirements such as financing capital expenditures. Therefore, options A, C, and D are incorrect.

Which of the Following Is True of an Aggressive Funding