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:

Areolar Glands

Modified sweat glands found in the areolar tissue around the nipple that lubricate and protect the breast during breastfeeding.

Rugae

Folds or ridges found in the internal stomach lining and other bodily organs that allow for expansion.

Perimetrium

Outer serous coat of the uterus; also called serous layer.

Endometrium

The mucous membrane lining the inside of the uterus, which thickens during the menstrual cycle and is shed if pregnancy does not occur.