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Memphic Memphic
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6 years ago
Which of the following statements is FALSE?
A) Creditors often place restrictions on the actions that the firm can take. Such restrictions are referred to as debt covenants.
B) Covenants are often designed to prevent management from exploiting debt holders, so they may help to reduce agency costs.
C) Agency costs are smallest for long-term debt.
D) Covenants may limit the firm's ability to pay large dividends or the types of investments that the firm can make.
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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anicidanicid
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6 years ago
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