All of the following are likely to increase the cost of a company's short-term financing except:
A) an increase in the bank's prime lending rate.
B) an increase in the compensating balance required.
C) taking a loan on a discount basis.
D) an increase in the company's debt rating by Moody's or Standard and Poors.

Question

Quizplus · Accepted Answer

An increase in the company's debt rating by Moody's or Standard and Poors would indicate the company is a lower risk borrower and could potentially lead to a lower cost of short-term financing. The other options would increase the cost of short-term financing.

All of the Following Are Likely to Increase the Cost