Asset Based Lending Is Commonly Used to Finance Leveraged Buyouts

Multiple Choice

Asset based lending is commonly used to finance leveraged buyouts. Which of the following is not true about such financing?

A) The borrower generally pledges tangible assets as collateral.
B) Lenders look at the target firm's assets as their primary protection.
C) Bank loans are secured frequently by receivables and inventory.
D) Loans maturing in more than one year are often referred to as term loans.
E) The target firm's most liquid assets generally secure longer-term loans.