Which of the Following Is Not an Example of an Affirmative

question 10

Multiple Choice

Which of the following is not an example of an affirmative (positive) covenant?

• A)Requirement to maintain a minimum level of working capital
• B)Requirement to furnish bondholders with a copy of the firm's annual accounts
• C)Requirement to limit dividends to net income
• D)Requirement to maintain a minimum level of net worth

Recognize the importance and procedure of proxy voting.

Understand the fundamentals of equity financing for corporations.

Identify the categories of stocks based on company size or investor's strategy.

Understand disclosure requirements for corporations issuing securities and the components of a prospectus.

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Definitions:

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by stockholders’ equity, indicating the level of debt used to finance assets.

Current Ratio

An indicator of a company's proficiency in paying off its short-term dues using the assets it currently possesses.

Debt-to-equity Ratio

A financial benchmark indicating the proportional use of debt and equity in the financing strategy for a company's assets.

Times Interest Earned Ratio

A financial metric assessing a company's ability to meet its interest obligations from operating earnings.