Which of the Following Is True of Debt Covenants

question 78

Multiple Choice

Which of the following is true of debt covenants?

I. Limit the issuance of additional debt senior to the obligation.
II. Specify minimum levels of selected financial ratios.
III. Specify minimum levels of earnings coverage.
IV. Prohibit excessive dividends or stock repurchases.

• A)II and III
• B)II and IV
• C)I, III, and IV
• D)I, II, III, and IV

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Definitions:

Cumulative Percent

A measure that represents the total percentage that is accumulated at each data point or within each bin when data is sorted in ascending order.

Frequency Distribution

A summary of how often each value occurs in a data set, typically displayed as a table or graph.

Victimization

The process of being subjected to harm or suffering, often in the context of crime, bullying, or abuse.

Frequency Distribution

A summary of a set of data that shows the number of occurrences of each unique value or bin of values.