Which of the following statements relating to working capital financing is not correct?
A. An aggressive policy uses long-term debt to finance fluctuating current assets
B. Long-term debt is less risky that short-term debt
C. A conservative policy uses long-term debt to finance fixed assets
D. Short-term debt is cheaper than long-term debt
E. The matching principle indicates that fluctuating current assets should be
financed by short-term debt
A. An aggressive policy uses long-term debt to finance fluctuating current assets
B. Long-term debt is less risky that short-term debt
C. A conservative policy uses long-term debt to finance fixed assets
D. Short-term debt is cheaper than long-term debt
E. The matching principle indicates that fluctuating current assets should be
financed by short-term debt