Asked by
Chelsea Rosales
on Dec 01, 2024
Verified
Large, strong companies frequently resort to commercial paper as a source of short-term funds because:
A) commercial paper dealers and lenders are flexible about repayment terms.
B) commercial paper is normally cheaper than other sources of short-term credit.
C) interest rates on commercial paper are very stable.
D) All of the above
Commercial Paper
An unsecured, short-term debt instrument issued by corporations, typically used for the financing of accounts payable and inventories.
Repayment Terms
Conditions agreed upon by lenders and borrowers regarding how a loan will be repaid, including interest rates and duration.
- Identify the benefits and drawbacks of different short-term financing alternatives.
- Understand the consequences of utilizing commercial paper for finance purposes.
Verified Answer
PQ
Learning Objectives
- Identify the benefits and drawbacks of different short-term financing alternatives.
- Understand the consequences of utilizing commercial paper for finance purposes.