Lenders Prefer to Lend to Firms with High Net Worth

question 36

Multiple Choice

Lenders prefer to lend to firms with high net worth because

• A)such firms are usually willing to pay higher interest rates.
• B)the owners of such firms have more to lose if the firm defaults on a loan.
• C)the government requires most bank loans to be made to such firms.
• D)such firms usually are unable to raise funds directly through financial markets.

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Definitions:

Multibranding

A marketing strategy that involves a company using two or more brands to offer similar products or services to capture a larger market share.

Do-It-Yourself Market

The sector of the market that sells tools, materials, and components which allow consumers to complete projects on their own without professional help.

Professional Construction Market

A segment of the construction industry focused on providing specialized services and products to professionals, such as contractors and architects.

Co-branding

A marketing strategy where two or more brands form a partnership to increase the value of their product or service to consumers by leveraging each other's brand equity.