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:

Legal Decisions

Judgments or rulings issued by a court that resolve disputes between parties and set precedents in the application of law.

Philadelphia Court

Refers to the judicial system or specific courts within the city of Philadelphia, which handle legal matters according to local, state, and federal law.

Federal Railroad Administration

A division of the United States Department of Transportation that oversees the nation's railroad safety laws and regulations.

Speed Restriction

Regulations set to limit the speed at which a vehicle can travel in certain areas to ensure safety.