Which of the Following Statements Is True

question 10

Multiple Choice

Which of the following statements is true?

• A)Bond covenants serve to protect bondholders at the expense of firm value.
• B)Bond covenants can serve to maximize firm value, which means shareholder value is also maximized.
• C)Although bond covenants may serve to maximize firm value, they destroy shareholder value.
• D)None of the above is a true statement.

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