Which of the Following Statements Is False

question 33

Multiple Choice

Which of the following statements is false?

• A) If the issuer fails to live up to any covenant, the issuer goes into bankruptcy.
• B) The stronger the covenants in the bond contract, the less likely the issuer will be to default on the bond, and so the lower the interest rate investors will require to buy the bond.
• C) Covenants are restrictive clauses in a bond contract that limit the issuer from taking actions that may undercut its ability to repay the bonds.
• D) Bond agreements often contain covenants that restrict the ability of management to pay dividends.

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Definitions:

Number of Calories

The amount of energy provided by the ingestion of food and beverages, measured in calories.

Type of Salad Dressing

Refers to the different varieties of sauces used to flavor salads, including but not limited to Italian, French, and Ranch dressings.

Grouped Frequency Distribution

A way of summarizing data that shows the frequency (or count) of observations within specified groups or intervals.

Intervals

A range of values between two points, often used in mathematics and statistics to specify subsets of real numbers.