Which one of the following statements is NOT true?
A) Companies using matching maturity strategy fund all working capital needs with long-term borrowing.
B) Long-term financing strategy relies on long-term debt to finance both capital assets and working capital.
C) All working capital and a portion of fixed assets are funded with short-term debt when companies use the aggressive funding strategy.
D) Companies using a matching maturity strategy fund all working capital needs with short-term borrowing.

Question

Quizplus · Accepted Answer

The matching maturity strategy involves matching the maturity of assets and liabilities, meaning working capital needs are typically funded with short-term borrowing, not long-term borrowing.

Which One of the Following Statements Is NOT True