A Disadvantage of Debt Financing Is That Creditors Often Impose

question 68

True/False

A disadvantage of debt financing is that creditors often impose covenants on the borrower.

---

Definitions:

Bretton Woods

Refers to the international monetary system established in 1944, creating fixed exchange rates, the International Monetary Fund (IMF), and the World Bank to promote global economic stability.

Supervise

To oversee, direct, or manage activities or people, ensuring tasks are completed efficiently and standards are met.

Exchange Rates

The equivalent worth of one currency in terms of another during conversion.

Currency

Money in any form when in use or circulation as a medium of exchange, especially circulating banknotes and coins.