Which of the following are common loan covenants? Assume each item applies only

Question

Which of the following are common loan covenants? Assume each item applies only during the term of the loan. I. Limit on future borrowing, II. Requirement that the borrower maintains a minimum stated level of net working capital, III. Limit on any sales or switches of assets, IV. Limit on the amount of dividends that can be paid

a. I and IV only

b. II and III only

c. I, III, and IV only

d. I, II, III only

e. I, II, III, and IV

Which of the following are common loan covenants? Assume each item applies only during the term of the loan. I. Limit on future borrowing, II. Requirement that the borrower maintains a minimum stated level of net working capital, III. Limit on any sales or switches of assets, IV. Limit on the amount of dividends that can be paid

a. I and IV only

b. II and III only

c. I, III, and IV only

d. I, II, III only

e. I, II, III, and IV

Explanation / Answer

Solution:

The answer to the above question is -

c.
I, II and IV

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