Restrictive Covenants Are Designed So as to Protect Both the Bondholder

question 14

True/False

Restrictive covenants are designed so as to protect both the bondholder and the issuer even though they may constrain the actions of the firm's managers. Such covenants are contained in the bond's indenture.

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Definitions:

Plessy v. Ferguson

A significant 1896 decision by the U.S. Supreme Court that confirmed racial segregation was constitutional if facilities for each race were "separate but equal."

Segregation

The enforced separation of different racial groups in a country, community, or establishment, often noted for its role in the historical and social landscapes of the United States.

Anti-Imperialist League

An organization established in the United States in 1898 to oppose the annexation of the Philippines and the American empire building.

American Citizenship

A status that entails specific rights, duties, and benefits in the United States, typically obtained by birth within the US, through naturalization, or by birth abroad to US citizen parents.