Firms choose to finance temporary current assets with short-term debt. Fixed assets and permanent current assets are financed with long-term capital (equity) plus long-term debt. The reason is

A. matching the maturities of assets and liabilities lowers default risk that firms will be unable to pay off its maturing obligations.

B. short-term interest rates have traditionally been more stable than long-term interest rates.

C. sales remain constant over the year, and financing requirements also remain constant.

D. interest rates are generally higher on the short-term debt than on the long-term debt.