All of the following are potential disadvantages of short-term debt EXCEPT
A) short-term debt must be paid back more quickly than long-term debt.
B) uncertainty of interest costs because short-term debt must be replaced often.
C) a greater risk of illiquidity than long-term debt.
D) short-term debt generally has a higher interest cost than long-term debt.

Question

Quizplus · Accepted Answer

The statement "All of the following are potential disadvantages of short-term debt EXCEPT" implies that three out of the four options are potential disadvantages, while one is not. Option D is not a potential disadvantage, as short-term debt generally has a lower interest cost than long-term debt. Therefore, the correct answer is D.

All of the Following Are Potential Disadvantages of Short-Term Debt