Which of the Following Are Common Loan Covenants? Assume Each

question 7

Multiple Choice

Which of the following are common loan covenants? Assume each item applies only during the term of the loan.
I.Limit on future borrowing
II.Requirement that the borrower maintains a minimum stated level of net working capital
III.Limit on any sales or switches of assets
IV.Limit on the amount of dividends that can be paid

• A)I and IV only
• B)II and III only
• C)I,III,and IV only
• D)I,II,and III only
• E)I,II,III,and IV

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Definitions:

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