Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate form for financing a new capital investme nt in plant and equipment? A. Trade credit. B. 6-month bank notes. C. Accounts payable. D. Common stock equity

Your firm has a philosophy that is analogous to the hedging (maturity matching) approach.

Which of the following is the most appropriate form for financing a new capital investme nt

in plant and equipment?

A. Trade credit.

B. 6-month bank notes.

C. Accounts payable.

D. Common stock 

equity
by

1 Answer

Answer :

D. Common stock 

equity. 
by

Related questions

Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate non-spontaneous form for financing the excess seasonal current asset needs? A. Trade credit. B. 6-month bank notes. C. Accounts payable. D. Common stock equity.

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Which of the following would be consistent with a hedging (maturity matching) approach to financing working capital? A. Financing short-term needs with short-term funds B. Financing short-term needs with long-term debt. C. Financing seasonal needs with long-term funds. D. Financing some long-term needs with short-term funds.

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Last Answer : A. Financing short-term needs with short-term funds

Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account for over half of its total assets. C. Strict adherence to the maturity matching approach to financing wD. Similar to the capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months.ould call for all current assets to be financed solely with current liabilities.

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Which of the following illustrates the use of a hedging approach to financing assets? A. Temporary current assets financed with long-term liabilities. B. Permanent working capital financed with long-term liabilities. C. Short-term assets financed with equity D. All assets financed with a mixture of 50% equity and 50% long-term debt

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Under a conservative financing policy a firm would use long-term financing to finance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes total assets to fall below the total long-term financing? A. Use the excess funds to pay down long-term debt. B. Invest the excess long-term financing in marketable securities. C. Use the excess funds to repurchase common stock. D. Purchase additional plant and equipment.

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How can a firm provide a margin of safety if it cannot borrow on short notice to meet its needs? A. Maintain a low level of current assets (especially cash and marketable securities). B. Shorten the maturity schedule of financing. C. Increasing the level of fixed assets (especially plant and equipmentD. Lengthening the maturity schedule of financing

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Which of the following would be consistent with an aggressive approach to financ ing working capital? A. Financing short-term needs with short-term funds. B. Financing permanent inventory buildup with long-term debt. C. Financing seasonal needs with short-term funds. D. Financing some long-term needs with short-term funds

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