A firm has previously not issued secured debt. If a firm de…
A firm has previously not issued secured debt. If a firm decides to now seek loans that are secured by property of the firm, this may increase the odds of getting a loan and/or result in a lower interest rate on the loan because a) It facilitates better outcomes for lenders with respect to collection of money owed to the lender in bankruptcy b) Lenders who doubt the firm’s ability to pay off loans out of cash flows know that the property securing their loan can be sold to pay off the loan. c) all the above d) none of the above
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