Question

The CFO of a satellite radio company was trying to work his magic today as he solicited another telecommunications/entertainment company to invest in his company in order to prevent bankruptcy. Having refinanced the company less than a year ago, the satellite radio finance manager had a $75 million note coming due today. The current financing arrangement represents:_______

a. short-term debt financing
b. a long-term sale of stock to privat
c. a leveraged buy-out.
d. the issuance of long-term bonds.

Answer 1

Answer:

The answer is A.

Explanation:

Short-term debt financing is the type of debt that must be paid within a year.

The CFO issued a $75 million note a year ago and is due now, this debt is within year, hence it is called Short-term debt financing.

If the debt repayment is more than a year, then it will be termed as long-term debt financing.