Which of the following issues falls under the heading of short-term ﬁnance?
A) Should a manufacturing plant be expanded to increase production capacity?
B) How much money should a ﬁrm pay in interest expense each year?
C) How much of a ﬁrm's current income should be paid out as dividends?
D) Should a ﬁrm offer straight bonds or convertible bonds?
E) How much money should a ﬁrm raise by issuing commercial paper?

Question

Quizplus · Accepted Answer

Short-term finance refers to financing needs for a period of up to one year, such as managing cash flow, paying for inventory or short-term debt, or raising funds through commercial paper. Option E refers to the amount of money a firm should raise by issuing commercial paper, which is a commonly used form of short-term finance. The other options relate to long-term financing decisions, such as expanding production capacity, determining interest expenses, or issuing different types of bonds.

Which of the Following Issues Falls Under the Heading of Short-Term