Which of the Following Statements Is FALSE

question 9

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 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:

Contribution

The act of providing or supplying something such as effort, knowledge, or resources for a common goal or the betterment of a group, project, or organization.

Costs of Turnover

Expenses associated with an employee leaving a company, including recruitment, training, and lost productivity costs.

Recruitment

The process of finding, attracting, and hiring candidates for a job or role within an organization.

Lost Revenue

The amount of money that a company fails to earn due to factors such as lost sales, business opportunities, or production downtime.