In Asset-Based Borrowing,the ________ Is the Percentage of an Asset's

question 60

Multiple Choice

In asset-based borrowing,the ________ is the percentage of an asset's value that a lender will lend.

• A)prime rate
• B)margin rate
• C)advance rate
• D)discounted rate

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Definitions:

Average Operating Assets

The average value of the assets used in the normal operations of a business, calculated over a specific period.

Market Price

The current value at which an asset or service can be bought or sold in the marketplace.

Preferred Dividends

The dividends that are allocated and paid to preferred shareholders before any dividends can be distributed to common shareholders.

Retained Earnings

The portion of net income not distributed as dividends to shareholders, but instead reinvested in the company or kept as reserve.