With regard to the hedging principle,which of the following would be an appropriate method to finance a minimum level of current assets required for year round operations?
A) short-term notes payable
B) trade credit
C) common stock
D) revolving credit agreements that must be repaid in a period less than 1 year

Question

Quizplus · Accepted Answer

The hedging principle suggests matching the maturity of assets and liabilities to manage risk. Financing a minimum level of current assets required for year-round operations, which are long-term in nature, would be appropriately done with long-term financing such as issuing common stock.

With Regard to the Hedging Principle,which of the Following Would