In a ________, the lessor acts as an equity participant supplying part of the necessary capital while a lender supplies the remaining balance.
A) direct lease
B) leveraged lease
C) sale-leaseback
D) capital lease

Question

Quizplus · Accepted Answer

In a leveraged lease, the lessor provides some of the necessary capital, but a lender supplies the remaining balance. This allows the lessor to have less equity tied up in the transaction and potentially receive tax benefits. Therefore, option B is the correct answer. A direct lease does not involve a third-party lender, while a sale-leaseback involves the lessor selling the asset and then leasing it back from the buyer. A capital lease is a type of lease where the lessee is responsible for the maintenance and other expenses associated with the asset, and it is considered more like a purchase than a lease.

In a ________, the Lessor Acts as an Equity Participant