

MCQOPTIONS
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1. |
-Under a conservative financing policy a firm would use long-term financing tofinance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes total assets to fall below the total longterm financing? |
A. | use the excess funds to pay down long-term debt. |
B. | invest the excess long-term financing in marketable securities. |
C. | use the excess funds to repurchase common stock. |
D. | purchase additional plant and equipment. |
Answer» C. use the excess funds to repurchase common stock. | |