Bond Contracts Generally Include Restrictive Covenants, Designed to Protect the Interests

question 14

Multiple Choice

Bond contracts generally include restrictive covenants, designed to protect the interests of the bondholders.Typical covenants restrict all of the following EXCEPT:

• A)the borrowing firm's investment activities.
• B)the borrowing firm's ability to issue additional debt.
• C)the borrowing firm's dividend policy.
• D)the firm's hiring of management personnel.

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Definitions:

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Public Radio Station

A radio station that is funded by public means, such as government grants and listener donations, rather than commercial advertising.