Which of the Following Is Not an Example of an Affirmative

question 10

Multiple Choice

Which of the following is not an example of an affirmative (positive) covenant?

• A)Requirement to maintain a minimum level of working capital
• B)Requirement to furnish bondholders with a copy of the firm's annual accounts
• C)Requirement to limit dividends to net income
• D)Requirement to maintain a minimum level of net worth

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Definitions:

Acquired Goodwill

Represents the premium paid over the fair market value of assets during the acquisition of a company.

Outstanding Voting Shares

The total number of shares of a corporation that are held by shareholders and eligible to vote at shareholder meetings.

Fair Value

The market value of an asset or liability, based on the current price at which it can be sold or settled.

Unrealized Loss

A loss that results from holding an asset that has decreased in value, but the asset has not yet been sold.