a. What is the reason for restrictive covenants in long-term debt indentures? b. What is the reason
Question:
b. What is the reason for provisions regarding?
(1) Maintenance of minimum working capital (or current ratio)?
(2) Maintenance of minimum shareholders’ equity?
(3) Restrictions on dividend payments?
(4) Power of creditors to elect a majority of the board of directors of the debtor company in the event of default under terms of the loan agreement?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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a Longterm indentures span such an extended period of time that they are subject ...View the full answer
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Related Book For 
Financial Statement Analysis
ISBN: 978-0078110962
11th edition
Authors: K. R. Subramanyam, John Wild
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