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

---

Definitions:

Power of Attorney

A legal document authorizing one person to act on behalf of another in legal, financial, or personal affairs.

Scope of Employment

The range of activities or duties that an employee is expected to perform as part of their job.

Pelvic Fracture

A pelvic fracture is a break in one or more bones of the pelvis, often caused by a high-energy event, such as a car accident or fall, and can range in severity from minor to life-threatening.

Fulfillment of Purpose

The achievement or realization of the intended goal or function of something.