Asset Based Lending Is Commonly Used to Finance Leveraged Buyouts

question 28

Multiple Choice

Asset based lending is commonly used to finance leveraged buyouts. Which of the following is not true about such financing?

• A) The borrower generally pledges tangible assets as collateral.
• B) Lenders look at the target firm's assets as their primary protection.
• C) Bank loans are secured frequently by receivables and inventory.
• D) Loans maturing in more than one year are often referred to as term loans.
• E) The target firm's most liquid assets generally secure longer-term loans.

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Definitions:

Point Manual

A document or guide that outlines a system for evaluating jobs or positions within an organization based on various criteria.

Relative Worth

The perceived value or importance of something or someone when compared with others.

Total Points

A system used in various contexts, such as competitive scoring or evaluation, where a cumulative tally represents performance, achievement, or value.

Wage Curve

A curve in a scattergram representing the relationship between the relative worth of jobs and wage rates.