Covenants Restricting the Use of Funds for Dividend Payments,share Repurchases,capital

question 3

True/False

Covenants restricting the use of funds for dividend payments,share repurchases,capital expenditures,and other business purposes are included so the creditor has greater assurance that cash will be available to make principal and interest payments when due.

---

Definitions:

Electronic Devices

Gadgets that operate on electrical energy, including computers, smartphones, and household appliances.

No Shirking Constraint

A concept in labor economics that suggests higher wages motivate employees to work harder, reducing shirking on the job.

Efficiency Wage Rate

A wage rate set above the market-clearing level by employers to boost worker productivity, discourage shirking, and reduce turnover.

Wage Rigidity

Wage rigidity refers to the phenomenon where wages do not adjust quickly or easily to changes in labor market conditions, often due to contracts, norms, or regulations.