If a Firm Issues Debt and Includes Protective Covenants in the Indenture

question 21

Multiple Choice

If a firm issues debt and includes protective covenants in the indenture then the firm's debt will probably be issued at ________ similar debt without the covenants.

• A)a variable interest rate rather than the fixed rate paid on
• B)a lower interest rate than
• C)a significantly higher interest rate than
• D)an interest rate equal to that of
• E)a slightly higher interest rate than

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