Question: Why would a lender offer unsecured short-term loans when it could demand collateral? How can a small business owner or corporate manager use financial leverage

  1. Why would a lender offer unsecured short-term loans when it could demand collateral?
  2. How can a small business owner or corporate manager use financial leverage to improve the firms profits and return on owners equity? Is there a potential danger of using financial leverage?
  3. In what circumstances might a large corporation sell stock rather than bonds to obtain long-term financing? In what circumstances would it sell bonds rather than stock?
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