Question: One thing lender sometimes require when lending money to a small corporation is an assignment of the common stock as collateral on the loan. Then,

  1. One thing lender sometimes require when lending money to a small corporation is an assignment of the common stock as collateral on the loan. Then, if the business fails to repay its loan, the ownership of the stock certificates can be transferred directly to the lender. Why might a lender want such an assignment? What advantage of the corporate form of organization comes into play here?

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