One Thing Lenders Sometimes Require When Loaning Money to a Small

question 14

Essay

One thing lenders sometimes require when loaning money to a small corporation is an assignment of the ordinary equity 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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Definitions:

Bandura's Study

Refers to the series of experiments by Albert Bandura that demonstrated the role of observational learning or social learning, especially the Bobo doll experiment that highlighted how children learn aggression through imitation.

Learned Helplessness

A state where an individual experiences feelings of inability to control their situation, stemming from traumatic experiences or ongoing unsuccessful attempts.

Aversive Event

An unpleasant or harmful event or experience that is avoided or minimized through learning or behavior changes.

Control Group

In experimental research, a group of subjects that does not receive the experimental treatment and is used as a benchmark to measure how the other tested subjects do.