Asked by Mulham Shbeib on Jun 01, 2024

verifed

Verified

Which of the following is NOT considered one of the basic questions of corporate finance?

A) What long-term investments should the firm choose?
B) At what rate of interest should a firm borrow?
C) Where will the firm get the long-term financing to pay for its investments?
D) What mixture of debt and equity should the firm use to fund its operations?
E) How should the firm manage its working capital, i.e., its everyday financial activities?

Corporate Finance

The area of finance dealing with the sources of funding and the capital structure of corporations, as well as the actions managers take to increase the value of the firm.

Long-term Investments

Assets that a company intends to hold for more than a year, such as stocks, bonds, real estate, and other financial instruments.

Working Capital

Working capital is the difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.

  • Characterize the positions and duties of financial managers within a corporation.
verifed

Verified Answer

ZK
Zybrea KnightJun 03, 2024
Final Answer :
B
Explanation :
The basic questions of corporate finance typically include decisions on long-term investments, financing those investments, and managing everyday financial activities. The rate of interest at which a firm should borrow is more related to the conditions of the financial markets and the firm's creditworthiness rather than a fundamental question of corporate finance strategy.