Borrowers can (and sometimes do)default on their loans when
A)the dividend yield on their shares of stock reaches zero.
B)they convert their bonds into perpetuities.
C)they declare bankruptcy.
D)they cannot find enough buyers of their bonds to sell all the bonds they wish to sell.

Question

Quizplus · Accepted Answer

Default on loans typically occurs when the borrower is unable to repay the loan according to the terms of the agreement. This can be due to a variety of reasons, including financial distress, inability to generate sufficient revenue to meet debt obligations, or a change in market conditions. One common reason for default is when the borrower declares bankruptcy, as they may no longer have the ability to service their debt obligations. Choices A, B, and D are not typically reasons for loan default.

Borrowers Can (And Sometimes Do)default on Their Loans When