Which
of the following is true concerning bond covenants?

Question

Answer

d.  Bond covenants are legal restrictions placed in
order to minimize the risk of default on bonds.

Answer

c.    If
a company violates a bond covenant, it means it has failed to make interest or
principal repayments on debt in a timely manner.

Answer

b.   Violation of a bond covenant requires that a
company declares bankruptcy.

Answer

a.  Bond
covenants are restrictions placed on bondholders to protect rights of equity
holders

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