Short-term financing might be riskier than long-term financing because,during periods of tight credit,the firm might not be able to rollover (renew)its debt.

Question

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During periods of tight credit, lenders may be hesitant to renew short-term debt, leaving the firm with the risk of default. In contrast, long-term financing typically has a fixed maturity and repayment schedule, reducing the risk of sudden liquidity issues.

Short-Term Financing Might Be Riskier Than Long-Term Financing Because,during Periods