Why Do the Issuers of Bonds Not Seek to Minimize

question 17

Multiple Choice

Why do the issuers of bonds not seek to minimize the strength and number of covenants in a bond agreement?

• A)Covenants favor the equity holders that managers work for.
• B)Covenants can increase the flexibility of the company issuing the bond.
• C)Covenants lower the interest rate investors will require to buy the bond.
• D)Covenants force the company to renegotiate the terms of the bond if they are broken.

---

Definitions:

Long-distance Warfare

Military engagements or strategies that involve combat forces attacking the enemy from a considerable distance away, often utilizing advanced technology such as drones or missiles.

Socio-historical Processes

The examination of social phenomena through historical context, exploring how societal structures and relationships evolve over time.

Gender Inequality

The unequal treatment or perceptions of individuals based on their gender, leading to disparities in opportunity, rights, and status.

Public and Private Spheres

The concept distinguishing between the public domain (societal, governmental, or communal spaces) and the private domain (individual, personal, or familial spaces).