Lenders Prefer to Lend to Firms with High Net Worth

Multiple Choice

Lenders prefer to lend to firms with high net worth because

A) such firms are usually willing to pay higher interest rates.
B) the owners of such firms have more to lose if the firm defaults on a loan.
C) the government requires most bank loans to be made to such firms.
D) such firms usually are unable to raise funds directly through financial markets.