Which of the Following Is a Type of Covenant in a Private

question 70

Multiple Choice

Which of the following is a type of covenant in a private equity investment contract?

• A) ownership right agreements
• B) ratchet provisions
• C) stock option plans
• D) all of the above

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Definitions:

Business Combination

A transaction or other event in which an acquirer obtains control of one or more businesses.

Common Stock

Equity ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Fair Value

An estimation of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.

Par Value

The face value of a bond or stock, indicating the amount that must be repaid at maturity (for bonds) or the nominal value of a share (for stocks).