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A Company Has a Debt Covenant in Place That Limits

question 73

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A company has a debt covenant in place that limits the amount it can borrow to 50% of its tangible assets.If the company's actual value for that ratio is approaching violation of this debt covenant,consistent with PAT,management would try to relax the constraint by:


Definitions:

Enumerated Powers

Specific powers granted to the government or its branches through a constitution.

Legislation

Laws or acts passed by the governing body or legislature of a political entity.

Federal Government

The national government of a country, responsible for governing the nation as a whole.

Contract Clause

is a component of the U.S. Constitution that prevents states from enacting laws that retroactively impair contract rights.

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