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3 years ago

Why do lenders require collateral for a secured loan? (10 points)

Business

1 answer:

Vanyuwa [196]3 years ago

6 0

Answer:

A) It reduces risk to the lender

Explanation:

Collateral refers to a valuable asset that a borrower offers to the lender to secure a loan. Typically, the collateral will have a higher market value than the loan amount. Asset mostly used as collateral include homes, properties, and motor vehicles. The lender will keep custody of the title documents until the borrower repays full amount borrowed.

Offering collateral for a loan indicates the borrower's willingness to repay the loan. The lender is assured of recovering their money. If the borrower defaults, the lender will dispose of the collateral to recover their money. This reduces the lender's risk.

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Winter's Toyland has a debt-equity ratio of .57. The pretax cost of debt is 8.2 percent and the required return on assets is 14.

True [87]

Answer:

Explanation:

We solve using the Weighted average cost of capital assuming a tax rate of 0% as we have to ignore taxes. Hence, we get:

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.14700

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Kd 0.082

Debt Weight 0.57

t 0

$WACC = 0.147(0.43) + 0.082(1-0)(0.57)$

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3 years ago

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Y_Kistochka [10]

Answer:

The correct answer is option (a) The court probably found that the state law was unconstitutional under the supremacy cause.

Explanation:

Solution

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The court's decision response would be that, I that when the situation arises or occurs in that case, where there is a conflict which arises between federal and state law then in that case federal law must be applied.

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3 years ago

At a price of $60 per bathing suit, what is the quantity demanded of bathing suits?

timofeeve [1]

Answer:

Explanation:

I think your question is missed of key information, allow me to attach the photo question below.

The quantity demanded is 30 units when the price is 60, we use the reconciliation method on the demand line.

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3 years ago

Which of the following is one of the advantages of forming a corporation?

s344n2d4d5 [400]

B a non-profit corporation

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3 years ago

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