Capital debt longterm interest - Financial management

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					              Sub: Financial Management                                                         Topic: Capital Structure



              Question:
              Rising of capital from the given data.

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              Suppose you believe that the economy is just entering a recession. Your firm must raise capital
              immediately and debt that will be used. Should you borrow on a long term or a short term
              basis? Why

                                      Short Answer- Simple yes or no and one sentence explain.

              Solution:
              In the periods of recession , debt funds is available then interest rates will be cheaper

              So it is better for the firm to go for long term fixed interest Bonds.

              Yes. Go for long term issue of Bonds.



                                                          ** End of the Solution **


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Description: Rising of capital from the given data : Suppose you believe that the economy is just entering a recession. Your firm must raise capital immediately and debt that will be used. Should you borrow on a long term or a short term basis? Why ?
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