Which of the Following Statements Is Incorrect

question 40

Multiple Choice

Which of the following statements is incorrect?

• A) Companies may take advantage of structural changes (e.g., Marriott) to evade the constraints of protective covenants.
• B) Bonds with protective covenants sell at a higher price than otherwise equivalent bonds without such protection for their investors.
• C) Protective covenants are offered for the benefit of common stockholders.
• D) Protective covenants are offered for the benefit of bondholders.

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Definitions:

Space Race

The period of cold war competition between the United States and the Soviet Union to achieve significant milestones in space exploration from the late 1950s to the early 1970s.

Soviet Union

A socialist state that existed from 1922 to 1991 in Eastern Europe and Northern Asia, composed of multiple republics, and led by the Russian Communist Party.

Nuclear Weapons

Explosive devices whose destructive potential derives from nuclear reactions, either fission or a combination of fission and fusion, capable of causing massive destruction.