QUESTION 1 For each of the statements below, indicate whether the statement is True or False AND provide one or two explanatory sentences to support your answer. (k) Debtholders take security over the borrower's assets and their maximum return is the interest rate set in the loan agreement regardless how well the net operating assets perform (1) Debt covenants usually have an EBIT/I ratio equal to 1.0 to ensure that the interest (I) will be met from the operating profit (EBIT), while the total debt-to-asset ratio can be as high as possible as long as the assets generate a return higher than the cost of debt. QUESTION 1 (cont.) (m) Standard and Poor's and Moody's bond ratings are positively and highly correlated with Altman's Z-scores because they both use financial measures for profitability, efficiency, liquidity, and solvency. (n) The original Altman Z-score model was praised for including the market value of equity divided by total liabilities, a measure of solvency, in the model