In one state, a mortgagee holds a lien on real property offered as collateral for a loan. the mortgagor retains both legal and equitable title to real property. if the borrower defaults on the loan, the lender must go through formal foreclosure proceedings to recover the debt. this state can be best characterized as what kind of state?
a) intermediate theory
b) mortgage theory
c) title theory
d) lien theory

Anew firm is developing its business plan. it will require $615,000 of assets, and it projects $450,000 of sales and $355,000 of operating costs for the first year. management is reasonably sure of these numbers because of contracts with its customers and suppliers. it can borrow at a rate of 7.5%, but the bank requires it to have a tie of at least 4.0, and if the tie falls below this level the bank will call in the loan and the firm will go bankrupt. what is the maximum debt ratio the firm can use? (hint: find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.)a. 41.94%b. 44.15%c. 46.47%d. 48.92%e. 51.49%