Corporate Finance: Are tangible and intangible assets equally good as collateral for investment finance?

Finance Jan 17, 2021

Expert Solution

Tangible asset is an asset which is backed up by a material possession, where as an intangible asset is an asset which could be in the form of good will.

Tangible assets are usually preferred as collaterals since they are material, liquid and often can have an active market.

Intangible assets too can be considered as collateral but are less preferable as compared to tangible assets since they are often illiquid & their value becomes difficult to determine.

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