If you have information that a recession is ending,and the economy is about to enter a boom,and your firm needs to borrow money,it should probably issue long-term rather than short-term debt.

Question

Quizplus · Accepted Answer

Issuing long-term debt would be a better option as a boom in the economy signals that interest rates are likely to rise. By issuing long-term debt, the firm can lock in lower interest rates for a longer period of time, which would be beneficial in the long run. Short-term debt would expose the firm to the risk of having to refinance at higher interest rates during the boom period.

If You Have Information That a Recession Is Ending,and the Economy