Question

Short-term bank loans (Select all that apply.) usually have a lower interest rate than long-term debt. usually have a higher interest rate than long-term debt. are not frequently used by large corporations as a significant component of capital structure. are frequently used by large corporations as a significant component of capital structure.

Answer 1

Answer:

A. usually have a lower interest rate than long-term debt.

D. are frequently used by large corporations as a significant component of capital structure.

Explanation:

A short-term bank loan can be defined as a type of loan that provides quick cash which mainly have a shorter repayment period when compared to a traditional loan.

Basically, when a small business owner (entrepreneur) or start-up needs to finance a temporal personal or working capital requirements but isn't eligible to apply for a line of credit from a bank; he or she can obtain a short-term bank loan.

Short-term bank loans usually have a lower interest rate than long-term debt and are frequently used by large corporations as a significant component of capital structure.