When a Lender Has Appointed a Receiver,its Primary Objective Is

question 41

Multiple Choice

When a lender has appointed a receiver,its primary objective is redeeming sufficient assets to clear a loan.To which of the following is the ability of the receiver to control the business to the exclusion of the debtor directly related?

• A) Courts recognize that creditors are in the lending business.
• B) Creditors have a duty to deal with assets in a commercially responsible way.
• C) The survival of the business is secondary to the creditor.
• D) Creditors must avoid creating conflicts of interest.

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Definitions:

Retained Earnings

Profits that a company keeps or retains rather than distributing to shareholders in the form of dividends, typically used for reinvestment.

Retained Earnings

The portion of a company's profit kept in the business after dividends are paid, which can be used for reinvestment in operations, debt reduction, or other purposes.

Component Cost Of Preferred Stock

The required rate of return by investors on a company's preferred stock, essentially the cost to the company of issuing preferred stock.

Dividend Yield

The financial ratio that shows how much a company pays out in dividends each year relative to its stock price.