Which of the Following Statements Relating to Debt Covenants Is

question 70

Multiple Choice

Which of the following statements relating to debt covenants is incorrect?

• A) Covenants are written into loan contracts.
• B) If a company breaches a debt covenant it will not need to renegotiate or repay the loan.
• C) Covenants restrict a company's activities.
• D) Companies enter into debt covenants with banks when they borrow a significant amount.

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