Typically,debt financing requires:
A) an asset as collateral.
B) a degree of ownership in the firm.
C) reduction of short-term assets.
D) reduction of working capital.

Question

Quizplus · Accepted Answer

Debt financing typically requires an asset as collateral, which serves as security for the loan in case the borrower defaults on their payments. This collateral can be in the form of real estate, equipment, inventory, or other assets that the lender deems valuable enough to offset the risk of lending money to the borrower. This requirement is one of the reasons why debt financing is often referred to as secured financing, as opposed to equity financing, which does not require collateral but instead involves selling ownership shares in the company.

Typically,debt Financing Requires