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Explain the reasons for the lender in setting requirement

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Problem 1: When offering loans to small firm, the lenders normally will require the company share of the small firm as a collateral of the loan. That means, if the firm defaults in the payment of loan, the share ownership of the small firm will be transferred to the lender. Explain the reasons for the lender in setting this requirement. Also illustrate the advantages it may have if the ownership of the firm is in the form of corporation

Reference no: EM132743809

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