Which One of the Following Is Not a Broad Function

question 31

Multiple Choice

Which one of the following is not a broad function served by debt covenants?

• A)Debt covenants usually preclude the borrower from being a merger target.
• B)Debt covenants serve as both signals and triggers,thereby assuring a steady flow of information from borrower to lender.
• C)Debt covenants are designed to preserve the borrower's repayment capacity.
• D)Debt covenants offer the lender some protection against credit-damaging events affecting the borrower.

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Definitions:

Governmental Contracts

Agreements entered into by government agencies with private entities or individuals for the supply of goods, services, or the undertaking of works.

Offerees

Individuals or entities to whom an offer is made, which they can either accept or reject.

Present Intent

A legal term referring to an individual's current intention to perform an act or designate a legal status, crucial for the validity of certain legal documents and transactions.

Definiteness

A characteristic of a contract that requires its terms to be clear enough for the parties involved to understand their obligations and rights.