Question: A problem with collateral is that its value is positively
A problem with collateral is that its value is positively correlated with the borrower’s ability to repay. Explain.
Answer to relevant QuestionsWhat aspect of syndicated lending is most attractive to the lenders? Comment on the following statement: A key benefit of leasing is that it allows for the effective depreciation of land. What policies and payments comprise a firm’s dividend policy? Why is determining dividend policy more difficult today than in decades past? Assume you are the sole owner of a profitable, private U. S. corporation. What do you think would be the most tax- efficient method of receiving owner-ship income (via salary, perks, retained earnings, or dividends)? How do the industrial patterns observed for dividend payouts compare to the patterns observed for capital structures? For example, are industries characterized by high dividend payouts also characterized by high leverage?
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