Which of the Following Is NOT a Common Bondholder Covenant

question 33

Multiple Choice

Which of the following is NOT a common bondholder covenant?

• A)Dividends cannot be paid unless there is sufficient cash to cover the next coupon payment.
• B)Dividends may be prohibited above a certain percentage of current earnings.
• C)If the firm has insufficient cash to cover required coupon payments,shareholders will pay interest directly from their own accounts on a pro rata basis.
• D)All of the above are common bondholder covenants.

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Definitions:

Electrons

Subatomic particles with a negative electric charge, orbiting the nucleus of an atom, involved in chemical bonds and electricity.

Orbital

A region around an atomic nucleus where an electron is likely to be found with a high probability.

Oxygen

A chemical element with symbol O and atomic number 8, essential for respiration in living organisms and combustion processes.

D-Block Elements

Elements occupying the d-block of the periodic table, known for their transition metals characteristic, including iron, copper, and gold.