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, such as commercial paper and notes payable. This is because short-term debt is cheaper and easier to obtain than long-term debt, which is typically used to fund permanent requirements. Therefore, option B is the correct answer.

Which of the Following Is TRUE of an Aggressive Funding