Lenders are typically compensated for the risk of default with
A) Shares of the company's profits.
B) Dividend payments.
C) The coupon rate.
D) Above-average interest rates.

Question

Quizplus · Accepted Answer

Lenders are compensated for the risk of default with above-average interest rates, which are higher to account for the increased risk of lending to borrowers who may not repay.

Lenders Are Typically Compensated for the Risk of Default with