Why might a company choose to finance permanent working capital with short-term debt?

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For answer-question

Corporate Finance

ISBN: 978-0134083278

4th edition

Authors: Jonathan Berk, Peter DeMarzo

See More Books

Question Posted: Nov 24, 2016 08:14 AM

See More Questions

Why might a company choose to use a limited partnership?
If plantwide overhead rates are allowed for reporting costs to external users, why might a company choose to use a more complicated and more expensive method for assigning overhead costs to products?
Why might a company choose to use the LIFO cost flow assumption? The FIFO assumption? The Moving Average assumption?
List three common situations that suggest that relations be denormalized before database implementation.
Use the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of H.J. Heinz Company and The Limited Brands Inc. a. Compute the average accounts receivable turnover ratio...
Respond to this statement: The importance of the location decision is often vastly overrated; the fact that virtually every type of business is located in every section of the country means there...
The Howell Corporation has the following account balances (in millions): Prepare an income statement and a supporting schedule of cost of goods manufactured for the year ended December 31, 2017. (For...
Management at the Kerby Corporation has determined the following aggregated demand schedule (in units): An employee can produce an average of 10 units per month. Each worker on the payroll costs...
Income elasticity Ei for food is about 0.30. Last year Ali spent $12,000 on food. If he gets a 4% raise in annual pay how much will he spent on food next year?
Most modern computing in organizations is based on clientserver models. Explain why this tends to be the case. Give an example of clientserver computing that you are familiar with and explain the...
What are the three steps involved in establishing a credit policy?
Do you agree that the European Union should be able to block mergers between two U.S.-based firms? Why or why not?
Refer to the information provided in Problem 6.47. Physical Units Beginning WIP (25% complete) ....... 11,000 Started during January ........... 74, 0000 Total to account for ............ 85,000 Good...
You have $52,260.84 in a brokerage account, and you plan to deposit an additional $3,000 at the end of every future year until your account totals $290,000. You expect to earn 14% annually on the...
According to the data collected by the Center for Medicare and Medicaid Services, health spending in the United States as a percentage of GDP has risen from 5% in 1960 to 18% in 2019. Which of the...
What are the most important concepts, theories, tools... you have learned so far in this class? 2 . What information don't you think you understand well enough yet? 3 . Are there any technology...
In relation to Australian Law can you explain the concept of lifting the corporate veil with reference to examples and relevant law?
Consider the wheat market. In this market both the demand and the supply curves are linear. When the price is Rs.15, the quantity sold is 15kg and there is a surplus of an additional 15kg wheat....
An order for relief creates an automatic stay. This automatic stay a. Prohibits creditors from taking action to collect from an insolvent company without court approval. b. Calls for the immediate...
TRUE OR FALSE: 1. Banks with a significantly large share of fixed-interest rate home loans are less exposed to interest rate risks. 2. Although Australian banks are pretty big, they are not...
Five years ago you took out a 5/1 adjustable rate mortgage and the five-year fixed rate period has just expired. The loan was originally for $300,000 with 360 payments at 4.2% APR, compounded...
Assume inflation is 0.2% per month. Would you rather earn a nominal return of 0.75% per month, or a real return of 6.5% APR, compounded annually?
See the Treasury Yield Curve from June 2013 below. At the time, some were concerned about whether the Federal Reserve's stimulus activities would lead to high inflation. Based on the Yield Curve, can...
By carrying out the audit of the financial statements in the Property, Plant and Equipment area, we were able to determine the reasonableness of the balance of the vehicle depreciation account. The...
The link between service delivery and external communications has a profound impact on customer perceptions of service quality. If you were to execute a service blueprint for dairy queen store and...
The city of marlohaven has a december 31 fiscal year end, during 20x5 marlohaven levied $1000000 in property taxes. the following details are expected collection of marlohaven's general fund property...

Why might a company choose to finance permanent working capital with short-term debt?

Question:

Step by Step Answer:

Financing permanent working capital with shortterm debt is an aggressive financing policy and is con...View the full answer

Corporate Finance

Students also viewed these Corporate Finance questions