When to issue Variable rate debt?

Under which of the following conditions would a firm be most likely to issue variable-rate debt? A) Operating cash flows are positively correlated with short-term interest rates B) Operating cash flows are negatively correlated with short-term interest rates Ans : A how come?

If your income goes up when the cost of debt goes up, you can service the debt. If your income goes down when the cost of debt goes up, you are SOL.

SOL?

“poopie” outta luck