Unsecured liabilities do not involve the collateral pledge


Which of the following statements is false?

Unsecured liabilities do not involve the collateral pledge that is essential for secured short-term liabilities.

Some forms of secured and unsecured liabilities can provide spontaneous sources of funding

If a firm defaults, unsecured lenders have little claim on the firm's assets whereas secured lenders have first claim to the pledged assets.

Both unsecured liabilities and secured liabilities have assets pledged as collateral, but the pledged collateral for an unsecured liability does not equal the borrowed amount.

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Financial Management: Unsecured liabilities do not involve the collateral pledge
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